High flying IPOs are pulling back


After a surge of enthusiasm, recent IPOs are pulling back.

As Market Insights has documented on multiple occasions, April and May marked a bullish turn for initial public offerings. Volumes have been at their highest levels since 2014. Several new companies also rallied out of the gate, a sharp contrast compared with recent years.

But this week, traders are taking profits in some of the best performing names.

Chinese tech stocks Iqiyi (IQ) and Huya (HUYA) doubled, or even tripled, between April and mid-June. Dropbox (DBX) surged more than 50 percent. Others like Pivotal Software (PVTL), Bilibili (BILI), Smartsheet (SMAR) and Docusign (DOCU) made similar moves. But this week, they’re down least 10 percent.

RadarScreen® with recent IPOs, showing performance since going public and in last week.

All these companies are in the high-flying technology sector, which has also been under pressure. Other recent IPOs with less notoriety are rising this week, especially energy firms like Cactus (WHD), Apergy (APY) and HighPoint Resources (HPR).

Did you see our special report about oil heading into the current OPEC meeting?
Click here for more.

In conclusion, big movers in the tech space face profit-taking while ignored energy companies are showing life. This isn’t a trade recommendation, just a reminder that the the IPO market is finally interesting again and worth watching!

Iqiyi (IQ) hourly chart showing rally since mid-May.
Advertisement #1 Trading Platform Technology - 8  years running!

Previous articleDon’s Notebook June 22, 2018
Next articleTrump tariffs and chart patterns
David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.