Amid the current stock market uptrend, these top IPO stocks are among the winners — and losers — after recent breakouts. On the upside, software stock Coupa Software (COUP) gained close to 18% before trimming gains. But Chinese IPO stock ZTO Express (ZTO) triggered a loss-cutting sell signal after a short-lived breakout.
IPO Stock Stages Recent Breakout
Quantenna Communications (QTNA) surged past a 19.34 buy point of a cup with handle base Tuesday, ending the day extended beyond the 5% buy zone. On the breakout day, volume soared over 400% above average to nearly 2.8 million shares, a bullish sign.
Shares are already about 10% above the 19.34 buy point amid continued strength following the breakout.
Quantenna stock’s formation is a first-stage base, which is more likely to succeed than a later-stage formation.
Despite a recent swoon, Leaderboard option play Coupa Software remains extended beyond an 84.63 buy point of a cup base. At its March 4 peak of 99.64, shares had gained as much as 17.7% from the buy point. On March 8, Coupa gave up the entirety of that gain, which would trigger a round-trip sell signal. Shares are volatile but bouncing off the 10-week moving average.
ProPetro (PUMP) gained as much as 23% from a 17.57 cup-with-handle entry after a breakout on Feb. 14.
In the latest reported quarter, adjusted earnings and sales increased 392% and 36%, respectively, vs. the year-ago period.
These Two IPO Stocks Trigger Key Sell Rule
ZTO Express surpassed a 20.28 buy point of a cup with handle on March 4. But the stock was unable to maintain that strength ahead of its quarterly results. Heading into its March 12 earnings release, shares were trading below the entry. Meanwhile, the stock’s relative strength line indicated sharp underperformance compared with the broad stock market, an additional reason to be cautious.
On March 13, the stock plunged as much as 7.8% after its quarterly results. Shares triggered the 7%-8% loss-cutting sell rule from the 20.28 buy point. Still, the Chinese stock found much needed support at its 50-day moving average. A new handle is forming, offering a new buy point at 21.46.
Despite recent weakness, the payment processor could easily shape a new base with a new buy point. The first breakout doesn’t always work, so investors should be patient and wait for a new entry.
The IPO Leaders list focuses on the stock market’s newest issues. The list has special screening criteria to locate up-and-coming stocks with strong fundamentals.
YOU MIGHT ALSO LIKE: