We’re on pace to have one of the busiest IPO weeks this year.
There will be 16 companies going public, and I expect a lot of action in the IPO space over the next few trading sessions.
Of course, the market is quite choppy overall right now.
So I also want to keep a lot of my trading attention on IPOs that I’ve already successfully traded — ones that have a solid history of price action and that are showing some discernible momentum.
Rinse and repeat is the way I like to describe it.
What has worked for me throughout October is trading new stocks that are riding growing digital trends.
That includes Cloudflare (NET), which I took an average of 150% gains on; Crowdstrike (CRWD), which I took a 100% win on; and SFIX, which I took an average of 125% gains on.*
Two of those same stocks showed up again on the 3-stock watchlist I want to share with you today.
- Cloudflare is a company that provides web infrastructure and security. Its products help sites protect against threats and improve and speed up performance and load times through its international data centers.
- As a cybersecurity stock, NET is poised to ride some massive trends as more people are online now than ever. Global cybersecurity is on pace to hit a market size of $208 billion in 2023, up from $150 billion in 2019.
- With current YTD gains of 218%, NET has been massively outperforming the overall market, making it one of the clear IPO winners of the year
- Even over the past month, the stock saw peak gains of 37.52%, beating that of the Computer and Technology sector’s gain of 7.9% during that period
- The stock has seen a lot of momentum, but has been consolidating around the $55 mark. My plan is to look for opportunities to get long if it can hold a base there and then ride the stock to new all-time highs near $65.
- Stitch Fix is a company that provides personal styling services online. Using data and algorithms, it can recommend clothing to shoppers based on size, style, and budget.
- The company has gained popularity as buyers have shifted away from brick-and-mortar retailers over the recent months.
- SFIX has gained over 35% since the last earnings report about a month ago, in which the company announced revenues of $443.4 million, up 3% from that period a year ago.
- The stock has held a bullish trend spectacularly over the past month and is now entering a consolidation or “squeeze” around the $35 level.
- SFIX has the potential to explode out of consolidation, and I’m interested in buying call options slightly at or out-of-the-money that expire the following week. But as always, I’ll be maintaining a protective stop, in case things move lower from here.
- Bill.com is a top provider of cloud software to assist workflow and payment processing. The company digitizes, simplifies, and automates financial operations of companies that are small to midsize.
- The company is a large part of the current digital revolution that’s helping companies shift away from manual and paper-based cash flow.
- The company has an earnings report coming up, which it will announce on November 5, 2020— a strong catalyst that we could see a run into. Revenues are rock-solid this year, having jumped from $32.9 million in the final quarter of 2019 to $38.8 million in quarter 2 of this year.
- BILL is showing some really impressive momentum, up 179% so far this year— and with a current trading volume of 325,485 shares.
- The stock has been trading in a well-defined range and looks like it could bounce off the $100 mark for a run to new all-time highs
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