Warning: ..... astrostuff ahead.
Hi folks,
IPOs present some real challenges to many analysts,
not least, is how to anticipate market turns in the
early history of any listed entity.
Of course, if we were paid the big bucks, like blodgett
and his cronies, we could just invent some rubbish
and feed it to the unsuspecting masses.
Real traders however, often need to evaluate markets,
with only limited technical data available .....
..... a typical example being an IPO.
Fortunately, with Gann's astrotrading tools, we can look
ahead from listing of the entity and make some fairly
accurate assumptions about market news/moves, on
particular key dates.
Here's a current example:
..... recently listed EAR has tested its lows recently,
but as there's very little technical data as yet, there
would be few traders who would commit to a trade,
based solely on the chart.
However this week, Gann traders will be watching for
positive news from EAR, on both 07 and 09062006 .....
EAR have just 23m shares on issue, too ..... and with
enough relevant details, this analysis can be done,
even BEFORE the entity is listed ..... !~!
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Here's some general thoughts on trading IPOs, but
please note, this is NOT ADVICE, simply a discussion ... ???
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XXX ..... as with many ipo's, there will be many traders
wondering about the prospects of the company, ahead.
There's some advantages to trading new listings, if we
can get our market timing correct.
Some of these advantages, include:
1. Most (not all) ipos will have sufficient cash to fund their
operations, without rattling the tin for more money.
2. A relatively low number of shares on issue, making
the stock more volatile for trading purposes.
3. With better market timing, we have an edge over
many other traders and "investors", as well as the
"blind stags", who are really only HOPING that
a stock will rally from the outset.
4. Using time cycle analysis, we can project anticipated
price swings, far ahead.
5. Time cycle analysis may result in entering stocks,
at prices below the original ipo.
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Of course, we must also look at the downside, too:
1. Sometimes, ipos are held so tightly, that liquidity
becomes a real issue ..... PSA was an example of this
and it took about 2 years to gain a larger shareholder
spread and improved liquidity for traders ..... but
meanwhile, it was fun to trade the sharp moves.
2. Being only newcomers, ipos can take a while to
become known to traders and even with good news,
it may take a couple of days for some traders to
respond, in some markets.
3. Often fundamentals have not developed enough
to make a good assessment of the management team.
4. Technically, there's probably not enough data for
most chartists, until the first year has passed .....
..... meaning, that they may have lost several
opportunities to trade the stock, in the initial
12 months.
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Now, by using Gann's methodology, we can forecast
many of the anticipated price swings by evaluating
the time axis only, on our charts.
Such methods are helpful, as:
1. Stags can gauge better exit points.
2. Traders can wait for the listing and often enter
at much lower prices, than the original ipo.
3. Chartists can use the time axis analysis to
confirm their own evaluations, using minimal data,
like candlestick patterns.
4. Using time cycle analysis for ipos, allows us to
improve both entries and exits, in our trades.
5. “Investors” can use time cycle analysis, as confirmation
of their own conclusions, for both entries and exits.
In summary, IPO's are a classic example of where technical
analysis is all but non-existent, due to lack of data .....
and the fundamentals are often exaggerated .....
..... step in, time cycle analysis or astroanalysis.
Call it what you will, these astrotools DO fill the technical
void, until there's enough data to give us a reasonable chart.
happy trading
yogi
P.S. ..... and trading IPOs like this, can mean getting
set, long before the general market generally
knows the IPO has started trading !~!
