Trading the hot new IPOs

A Tuesday Trade Edition: One of the most important concepts in trading is to review your work, and learn from the good and the bad. It’s critical to identify what’s working — to do more of it. Each week, you’ll get a trade from my trading journal, in which I explain my whole thought process from start to finish. Trading is all about finding something that works, and applying it, over and over again. That’s how you find trading success. So study up on this “Tuesday Trade” and let’s get to work.

I’ve been trading PLTR for the last two months, and during that time frame, there’s been a variety of trades. These trades have been a collection of butterflies at my target zones (at $30 and $35) and long calls.

I’ve been trading this ticker because I’ve been enjoying trading the hot new IPOs that have come onto the market, as all of the attention they’re given can equal some great momentum moves. 

And PLTR has been no different…

Why PLTR:

Prior, and directly after their first earnings report last quarter, the ticker showed some great momentum to the upside. After that momentum waned around $32 a share, it pulled back and started to squeeze (which of course you know, is the foundation of everything I do!)

The most recent squeeze occurred around the 34 EMA. It was a great pullback zone and a great spot for entry. Keep in mind, that when a ticker squeezes, there’s normally going to be a pullback as that’s what occurs when a stock is in consolidation. That pullback zone provided a great spot for entries for both butterflies and long calls. 

PLTR – Entry Chart:

Here’s a snapshot of what PLTR looked like when I got in. You can see that the TrendStrength Turbo candles turned red because they were at the 34 EMA. The Turbo VZO also got oversold which is another great buy signal. And of course, we have the SqueezePro which showed the slingshot squeeze that was forming. 

If you’d like to try and take advantage of similar moves like this one above, join my Mastery before February 5th, and you can participate in a bonus live trading day.


Playing The Fly: 

Now, even though butterflies are my favorite, I’ll note that it’s been tricky with this ticker, as timing the target has been a little tricky. PLTR has stayed in consolidation since it made the high in December, and waiting for it to breakout has tested my patience. There were a couple butterflies I had to close because they just didn’t breakout in time. That’s why in this case, due to timing, the long calls worked out better. 

Here is the move that (finally!) occurred in PLTR on Friday, which then continued into Monday. 

As you can see, the momentum in the squeeze shifted, along with the shift in volume you can see via the TurboVZO. 

Overall, I did have some flies that finally made the $30 price target (one I was waiting for for a month). These flies were pretty close to perfect. However, what would have made them even better was if the expiration date was 7 days less. I did have one on at that expiration date, but I didn’t think it would make it there in time, so sadly I took it off. 

Overall though, this combination of a hot stock, the TurboVZO, SqueezePro, and a combo of flies and calls, ended up with a nice trade that I took in the Mastery. 

If you’d like to join me while I set up my trades for February, click here for my live trading session on February 5th! This month, we will be focusing on the continued run into earnings, earnings trades, and looking for more hot IPOs, just like Palantir! I look forward to seeing you there. 

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