Monday, October 6, 2014

Comparing IPO Bases

As William J. O'Neil stated in his popular investment book "How To Make Money In Stocks", chart patterns often repeat throughout history, and serve as models for future big winners.

Recently GoPro Inc. (GPRO) came public back in late June,  and quickly started a rapid 100% rise from its IPO price in 1 trading week.  It then settled into a constructive sideways base for the next 8 weeks where it corrected just 28% off it's highs.

The stock broke out on August 28 and has proceeded  to advance nearly another 100% from its breakout  over the July 31 high at $48.40.

A newer IPO in a different sector, El Pollo Loco (LOCO) came public in late July.  It too made a rapid ascent from its IPO price in a week's time, and has now settled into a sideways, 9 week base.  I'm watching this for a close over the intraday high back on September 15th with a corresponding rise in volume.

As always, use stops to protect from potential big losses.

Here are the charts of the stocks mentioned.






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