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The work-from-home selloff was in full swing on Monday after Pfizer (PFE) announced positive trial results.  

If there’s anything that will get people back in offices, it’s a vaccine with ninety percent efficacy. 

I shared 3 PFE biotech sympathy plays as trade ideas that day and they each showed some upside on Tuesday.  

However, I also mentioned I’d be considering buying the dip on some of the trending digital stocks, if I could spot some nice setups. 

As you know, I’m a big fan of tracking the big institutional money, and it appears that some firms like Ark Investments are doing just that. 

 

 

If you’ve been following along with my IPO Payday trades, you know that I’ve been trading a lot of those names this year. 

Right now, I’m seeing a potential buy-the-dip opportunity in Sprout Social (SPT)— there’s a fundamental and technical reason to consider getting long here.

 

Sprout Could Rebound Off Monday’s Upbeat Q3 Earnings 

 

Sprout Social (SPT) is a company that provides social media management solutions for businesses. 

With so much communication taking place online over the recent months, it’s no surprise that the stock has been showing lots of growth. 

The company is trusted by 25,000+ world class brands of various sizes, including Subaru, Evernote, and Shopify. 

SPT may have sold off with the rest of the work-from-home stocks on Monday, but it had an outstanding earnings report that came out that same day. 

The Q3 results for the period that ended on September 30 were better than expected and showed positive revenue growth. Their Q3 revenues of $33.7 million showed an increase of 27% year-over-year. 

The company’s CEO, Justyn Howard, called it a “breakout quarter,” thanks to a record number of new customers. 

This has me feeling like the selloff was just a symptom of the overall market and not the individual stock. 

 

SPT’s Technical Setup Shows Upside Potential

 

SPT has been trading in a nice channel the past 6 months, which shows some fantastic growth. 

On Monday, the stock fell to the lower end of its trading range, along with the rest of the work-from-home stocks. 

As of yesterday, most of the carnage appeared to be over with, and the stock showed signs of continuing its pattern of upside. 

The stock closed yesterday up 5.12%. 

 

 

I believe we could see some continuation from yesterday’s recovery— with a chance to reach its previous all-time-high at $50, and possibly break past all-time-highs to $55. 

I don’t currently have a position in SPT. But if I do decide to trade it, my IPO Payday subscribers will be the first to find out. Join my latest IPO trading workshop here to learn more about how I’m trading these new public companies. 

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 podcast where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share some of the wisdom needed to live a successful life.

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