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It’s a chopfest out there in the market, which means we’ve been seeing a lot of overall sideways price action. 

But one of the things I like to do in this market environment is look for the outliers. 

That means finding some of the fastest movers— the growth stocks. 

Improving fundamentals are definitely a factor for consideration— though for me, it really comes down to a combination of a few factors…

Right now, we’ve seeing a large amount of growth stock activity in the IPO space. 

Cloud service providers and other digital stocks have really taken a shine during the pandemic— it’s a trend that’s still showing few signs of slowing. 

Gartner, the tech research firm, anticipates a growth in public cloud computing spending to show a 6.3% growth rate for the year of 2020, with plenty of room to continue. 

Case in point, I recently decided to take a shot at web infrastructure/security provider, Cloudflare (NET), which grew its sales 48% year over year last quarter. 

I just took 3 rounds of profits on my position… 100% on the first leg, 150% on the second, and 200% on the remainder.* 

I continue to see a tremendous amount of potential in this growing digital space, so I want to share 3 more picks on my watchlist.

 

Fastly Inc (FSLY):

 

 

  • Fastly provides infrastructure software. The company offers cloud computing, image optimization, security and streaming solutions
  • In the past couple of days the stock attracted a lot of attention from investors and traders. And rightfully so: the stock went from $99 to $120 in just one day of a massive breakout
  • Even though I usually prefer to buy stocks right when they break out, FSLY has shown so much momentum, it’s impossible to ignore
  • I think this idea is more suitable for aggressive traders who are looking for high reward situations and are able to stomach more risk
  • I would like to buy this one on dips as long as the $118 area holds. I think we could see $160 pretty quickly should it break above $130

 

Unity Software Inc (U):

 

 

 

  • Unity Software Inc. operates a platform which provides software solutions to integrate interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. The company has customers globally
  • The stock is a recent IPO. It opened for trading at $75 on 9/18/2020 after pricing at $52
  • Unity Software is used for anything gaming and VR related, which is one of the hottest areas of growth for the next decade
  • I like how much strength the chart is showing: after a quick run to the highs of $102.63, the stock pulled into $82 area where it found support and is now showing signs of another leg higher
  • I think this is a great long setup. If U momentum continues next week, it could see $120 within the next 8 weeks and possibly even higher in the longer term. I wouldn’t want to see it get below $94

GoodRX Holdings (GDRX):

 

 

  • While this might seem like a biopharmaceutical company based on its name, in reality it’s a tech company which operates a digital healthcare platform. It operates in the United States
  • GDRX is another recent IPO. It opened for trading at $46 on 9/23/2020 after pricing at $33
  • The stock of its main rivals TDOC, went from $75 to $220 since the beginning of the year, which means that investors are predicting accelerating growth for the sector
  • This chart is displaying similar traits as U: after a quick pop to the highs of $64.22, GDRX has pulled back to $48 area and is now consolidating at $55
  • I believe that this one is another great setup for a medium to long-term hold. As long as the stock manages to stay above $50, I think we could see $80 in a couple of months

Check out These Trades in Real-Time

These trades have high potential due to a combination of strong growth and good technicals.

Whether I actually decide to trade them, I won’t know until Monday.

If I do, my IPO Payday subscribers will be the first to find out.

Click here to learn more about IPO Payday.

Author:
Ben Sturgill

Ben leads two services at RagingBull. IPO Payday can help you pinpoint, position, and profit from IPOs. In Daily Profit Machine Ben guides day and swing traders to profit by trading the SPY Index. Ben hosts the RagingBull.com weekly podcast WealthWise where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share the wisdom needed to live a wealthy life.

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