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IPO Trading Review for the Week of January 31, 2022 – Febuary 4, 2022

February 6th, 2022

Despite a rally in the general market, mainstream IPOs are still on hold, leaving low-float IPOs, biotech, and bank/financial debuts as the only options available on the menu. Not much worth playing, but still some opportunities to watch and learn, build up the mental index, and even take some relatively easy profits.

While we continue to avoid the debut entry on these low-float IPOs, catching the dip and undercutting the opening bid have provided some stress-free entries that have paid off, along with the Day 2 pump setup… but don’t be greedy: nothing is running for long, and smart day traders are acting quickly to lock in wins.

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Catch me live at 12:00 PM EST (noon) on Benzinga Live to review last week’s winning IPO trade and preview the IPO Calendar for the week ahead:

https://www.youtube.com/watch?v=DOdJoxesHGM

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Ok, Let’s take a look at what happened last week in IPO Land:

Rescheduled or Cancelled:

– Direct Digital (DRCT):
Rescheduled to Next Week
Samsara Vision (SMSA): Cancelled/Delayed

Maris Tech (MTEK) – February 2, 2022 | 3.7M Units (1 Share + 1 Warrant)
IPO Price: $4.20
Debut Price: $3.00
Day 1 High: $3.48
Day 1 Low: $2.71
High Since Debut: $3.83
Low Since Debut: $2.57

Watch the Live Stream of this Debut:
https://www.youtube.com/watch?v=uidon7YYKU0

Day 1 Action: We saw a heavy sell-side imbalance at the $3.00 price in the pre-debut IPO crossing, and called out the expected drop down to a possible halt, which would be at $2.70. So we placed our entries just above $2.70 and were rewarded with an ideal entry off an opening drop to exactly $2.71 that bounced back into a run that topped out at $3.48 before losing steam and fading back down as low as $2.80 – the perfect setup for a trailing stop loss to secure a stress-free win. An end of day run brought this back as high as $3.30, so if you missed the chance to exit on the initial spike (no reason to have not sold out with a trailing stop loss).

Day 2 Action: This one delivered the Day 2 run we’ve come to expect from these low-float IPOs that fail to make a significant pop on Day 1, with a run from the $2.80s up through a halt to top out at $3.83. Perhaps a better win opportunity, but a less certain boost than the opening dip-to-run than we caught on Day 1, but still another trend repeating itself, and a good indicator that we can hope for such setups on future low-float IPOs.

Looking Ahead: I expect this one to settle down for a little while, but with warrants executable up at $5.25, there is plenty of incentive for MTEK to make an attempt at boosting its price once QPX expires in about 35 days… an announcement of a large military contact would likely be sufficient send this low-floater on a run. If you’re bag holding, consider waiting to see if you get an opportunity to sell on such a spike, and don’t get greedy: you’re likely not to be the only one holding at your level: so if you are lucky enough to ride this into a green position, set a stop loss at the non-loss level and steadily increase it if you have the chance to edge into some profits.

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Arcellx (ACLX) – February 4, 2022 | 8.25M Shares
IPO Price: $15.00
Debut Price: $19.00
Day 1 High: $19.00
Day 1 Low: $15.79
High Since Debut: $19.00
Low Since Debut: $15.79

Day 1 Action: I mean, there’s a reason I don’t touch biotech IPOs, and we see again and again that especially when they debut with any kind of a premium, it’s nothing but downside. Priced at $15 at the low-end of range ($15-17), and after opening at $19, dropped down to $17 with further movement below $16.

Day 2 Action: This was a Friday IPO, so we don’t know what will happen on Day 2, but for most of these, we expect lower lows… not something to consider entering until it’s gone down to maybe $10s, and even then, why get involved with a Phase I pharmaceutical this early?

Looking Ahead: I don’t expect any pharmaceutical company that’s still in Phase I trials to deliver groundbreaking news on the QPX, so no reason to add a bag holding position to your portfolio. Better to stay away and find other trades.

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Nuvectis (NVCT- February 4, 2022 | 8.25M Shares
IPO Price: $5.00
Debut Price: $3.95
Day 1 High: $4.39
Day 1 Low: $3.21
High Since Debut: $4.39
Low Since Debut: $3.21

Day 1 Action: Even low-float pharmaceutical IPOs are generally busts… moreso when they aren’t available on multiple trade desks (WeBull and TD Ameritrade didn’t have the ticker setup for trading. Despite a slight bump off the open in the second minute of trading and opening flag just above the debut price, NVCT proved that it wasn’t worth the downside risk and punished those who like to take unnecessary chance on a biotech debut with a swift fall from the opening wedge around the $4.00 level down to a bottom of $3.21. Volume pretty much evaporated from there, and bag holders are left stuck in a position of hoping for a trading group pump on Day 2.

Day 2 Action: This was a Friday IPO, so we don’t know what will happen on Day 2, but for most of these, we expect lower lows… yeah, I copied an pasted that from the ACLX recap above… but this one has a better chance at a Day 2 pump than ACLX (if I had to choose between the two…. the better option is likely to just sit it out and wait for QPX if you’re dead-set on trading this one).

Looking Ahead: This one might be interesting to enter for a ‘want-and-see’ position below the Dental Line (tooth-hurty) going into QPX, but even then it’s kind of a stretch given how early they are in Phase I for their lead candidate..

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