This IPO was a disaster. It went straight down after a lot of hype leading up to its first day of trading.
However, there was a lot of legitimate excitement about this IPO, and it could easily return. And a return to its IPO price from today’s using today’s trade plan will be a 50% gain.
If the bullish excitement returns, you’ll likely be looking at it back at its IPO price and wondering if it’s still a good buy.
Continue reading for today’s trade idea on when to get in before that happens.
As you can see on the LYFT chart below it based out in April, then sank to new lows in May. The day before the low day is marked by massive volume.
This pattern is one of exhaustive selling and it is a good indication that the low is in.
However, LYFT has an additional pattern that followed the climax low. It’s been consolidating in the same range that it did before the May decline.
As a result, a break over this consolidation would complete a very powerful bottom formation.
The trade is to buy over $63.50, which will represent a breakout, and put a stop under $59.00.
Expect it to have trouble getting through the $75-$90 range, but if you’re in the trade under $65, you should be more comfortable with volatility up there.
That’s the reason to look at it now instead of waiting until it looks like it’s recovered.
Rick Nartarian, Chief Investment Officer
The American Investor Daily