In this post, we will learn how we can trade an IPO stock. IPO stock is the one which is getting listed first time on exchange and has no past history of trading on stock exchanges.
Most of the traders use charts to make trading decisions but when a stock is getting listed for the first time on exchange we don’t have any of the past chart data so making trading decision is extremely difficult.
When to Buy?
Most of IPOs getting listed after 2017 are getting listed over a good premium of 10-50% easily. Most of the time it has been seen a stock goes up after getting listed
Buying decision: We need to take a 10-15min chart of the stock and wait for at least 30 min before making any trading decision. We buy a stock when it goes above day high with 2-3% SL and should keep a target of 2-4%. Risky traders can also trail stop loss so as to maximize profits.
Important points
- The stock should trade above its issue price.
- The decision should be made only after 30 minutes.
- Only buy signal is generated from this setup. No selling trade should be taken.
- Buy the stock when it goes above its 30 min high price.
Some examples of IPO stocks which got listed in 2019
These are the stock where our buy trade got triggered.
These are the stocks where no trade got triggered as it did not satisfy the fourth condition.
Below stock gave less than 2% move after triggering out buy. But if you had used 2% SL you can easily manage your risk.
Hope you had liked our post.
Happy Learning.
