IPO Trading Review for the Week of September 13-17, 2021

September 19th, 2021

After what seemed like an eternal break in the world of IPO debuts, we were hit with a deluge of IPOs that brought a wealth of opportunities for substantial profit taking. I must admit, I was a little rusty, and flubbed a few clear winners, yet I still made out like a victorious Warrior on the battlefield.

Suffice to say, IPOs are BACK IN PLAY!

Before we get started – please be sure to catch me on Monday morning at 9:00 AM EST on Benzinga Pre-Market Prep to review Next week’s upcoming IPOs:

Let’s review the IPOs from last week, and take notes for the continuing stream of IPOs lined up for next week:

Sportradar Group (SRAD) was received with a bit of tentativeness by the markets, as the lead soldier in the charge of IPOs for the week. Sensing the hesitancy, I laddered a string of limit orders below the debut price when I saw the indication price drop down to match the IPO price at $27.00. SRAD proceeded to drop off the debut to bottom of $25.02, fake a recovery to the mid $26.50s, and then drop to further lows at $24.20 before recovering to close around $25. This is where the confident trader recognized that this stock is pretty strong, took a hit on a relatively cold day in the market, and was due for a Day 2 recovery. Averaging your position down on dips, and establishing a low average cost paid off, as Day 2 brought a recovery to $27.50 at the close, and Day 3 offered $28.22 on an early morning run. This is why it often pays to read the market sentiment, average down on opening day dips, and wait patiently for the opportunity to get out at a non-loss or win.

Tyra Biosciences (TYRA) I sort of blame this one for throwing off my reading of the subsequent debuts of the day, even though I had no intention of playing it. After debuting at a ridiculously high premium of $29.90, it went into free-fall at $22.05. I had called out $23.05 as a potential entry for a rebound, but got spooked and lowered it to $20.55: TYRA bottomed at $22.05 and then instantly shot up through a halt to a peak at $29.00. After missing the rebound, and given that SRAD and TYRA had taken nose dives off their debuts, I was starting to question the strength of the IPO market. TYRA was one of the biggest losers of the week for anyone who played it and held through, closing at $19.91 to end the week. This is why I generally avoid biotechs.

PROCEPT BioRobotics (PRCT) after watching TYRA tank, my conviction in PRCT was all but shattered, causing me to enter on the debut at $35.00 but as soon as it moved up, I protectively inserted a stop-loss at $35.05, only to be stopped out during a momentary dip in the 4th minute prior to a relentless run up above $42. It then settled into a zone in the $40.00 range, before an end of day run spiked it to $44.19. What had been my high-conviction play of the week turned me into a remorseful spectator.. but hey, I avoided a loss and kept my funds freed up for subsequent plays (I wish I could say I put those funds to use wisely, as you will see in a second, my skills were clearly a bit rusty).

Definitive Healthcare (DH) in what turned out to be one of the hottest IPO plays of the week, DH debuted at $37.25 and pretty much marched upwards off the debut and didn’t stop running until it peaked at $50.30 on Day 3. I saw the setup, but didn’t know the product, and had been focused on PRCT, so I missed this one… oh well… there were plenty of others.

Dutch Brothers (BROS) sheesh… this one was the runaway train of the week, and I missed the boarding call by mere seconds as I rushed to up my Limit Order right as the ticker debuted. Those who did catch this one on-boarded at $32.50 and rode an opening shot of caffeine straight up to $39.99. Those who rode through to Day 2 reached a peak of $52.00, and you held on through Day 3, a market opening run up to $54.39. Congrats if you pulled in on this one… and I hope you locked in profits on the way up. After touching $54 on Day 3, it took the elevator down to a bottom at $42, and has since recovered back to $44… still almost no way to take a loss on this one, BROS.

On Holding (ONON) with Michael Jordan ringing the bell to open trading, ONON was the talk of Wall St for this debut, but the high debut premium at $35.46 seemed to dampen the enthusiasm for the immediate shot off the starting blocks. After a short consolidation period, ONON finally found its legs, and bolted into a top at $38.00 but like an aging tennis player, fatigued quickly, and dropped down to close the day just about the debut price at $35.10. However, the Day 2 media cycle did its job, and as expected ONON made it’s expected comeback throughout Day 2, reaching a peak of $40.13, and I was able to lock in my second win of the week, exiting a little early in order to load up on FORG, which turned out to be my best play of the week.

Thoughtworks *Turing* (TWKS) perhaps riding the tide of the other strong IPO debuts, and coming to market with a relatively modest debut premium compared to the othse, TWKS initially dropped from it’s $26.00 debut to a low of $25.16, offering anyone who played this with a ladder entry a great cost basis which to ride the steady climb into the Day 1 peak at $29.90 minutes before the closing bell. Day 2 brought multiple peaks just above $31, and Day 3 offered further runs up as high as 34.43. Things were looking hot in IPO land at this point.

EzFill Holding (EZFL) let’s take a moment to visit the world of low-float, odd-ball stocks for a moment, as EZFL gave us much of what we’ve come to expect in terms of these gimmick-plays. It debuted at $4.48, and if you didn’t buy the IPO shares offered on WeBull and ClickIPO, you were smart to wait for a dip down below $4.20 to load up on shares… From there, you simply had to wait for the social media pumpers to do their thing, and either exit in the earliest of pre-market trading on an app that provides 4:00 trading (in which case a few shares were sold at $5.29), or sit tight for the inevitable brief run that has become typical of these trades. True to form, those who filled up in the low $4s were given that opportunity at roughly 1:10 PM EST on Day 2, when EZFL spiked up to $5.48 before running out of gas and steadily declining into the remainder of the week… likely never to be heard from again (unless of course, they pump it again, which also seems like an inevitability).

Pasithea Therapeutics (KTTA) this sleepy low-float biotech was largely ignored by the market, and there was no real reason to play it… so I watched it debut at $4.00 and didn’t think twice about playing it even as it dropped as low as $3.30. For some impulsive reason, I bought the opening dip on Day 2 when it dropped below $3.00, I mean, these low float IPOs have to run at some point, right? Well, it did, and in the early afternoon on Day 2 it randomly spiked up into a halt, giving the perfect opportunity to set a limit order at just about any price below $3 for a guaranteed victory. The halt was at $3.69, it resumed trading at $4.13 for a quick win… Yay… but given the low conviction, I only played it with a handful of shares… so yeah, whatever. A win is a win. (probably won’t try that again).

DiCE Molecules (DICE) I don’t even regret missing this one, despite it opening at $30.00 and making ever-so-brief runs to $40 on Days 1, 2, and 3. The volume, spread, and volatility of DICE was not worth the trouble – I would have no idea of how to play it even if I had traded this confusing biotech, as it regularly spiked down as low as $31 and randomly spiked up as high as $40.50. Sometimes you miss big winning trades that you really regret, this wasn’t one of them.

ForgeRock (FORG) Ok, so I finally nailed a big winner on the final IPO of the week, and even then, left plenty on the table. FORG debuted at $35.00, which seems to have been the magic debut number this week, and pretty much behaved exactly as planned. While Day 1 was not spectacular, with a momentary opening dip to $33.16, followed by a steady climb up to a high of $37.74, it was the Day 2 run that gave the real profits. After opening with a strong run up to $41.00, it then returned to baseline around $40.00 … short sudden dips triggered out a few of my stop losses, and by the time the big run came, I was down to my last block of shares. I kept my stop loss a little tight once it broke $41, and was happy to lock in a win just below $41.50, though I was a little remorseful when it topped out the run just above $44… I wouldn’t have held any longer than that anyway, but FORG continued with a second push up to $45 before fading towards the end of the day down to $42. But it wasn’t quite done yet. In an act of heroic defiance, FORG lurched to a peak of $47.15 in the final minute of trading, and put an exclamation point on what was for the most part a phenomenal week of IPO trading.

In retrospect, I’m thrilled to have the IPO play back in the cards, and super stoked that so many of my fellow IPO Warriors were able to lock in substantial gains using the IPO Warrior trading strategies. If I did help you take some profits, please consider making a contribution to my whiskey fund: I don’t otherwise charge anything from my ideas, and am not a professional trader, so every contribution is greatly appreciated.

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Catch me on Monday Morning at 9:00 AM EST on Benzinga Pre-Market Prep to review next week’s full slate of IPOs, and let’s keep the victories coming!

NOTE: The information in this email is NOT financial advice, and I am not a financial advisor, this is just information and should be used accordingly. Trading stocks is risky, you could lose money, and there is no guarantee that past performance will be represented in future results. I may hold or take positions in securities mentioned in this newsletter. and what else… oh yeah: good luck in the markets!

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