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Is the Stock of Square (SQ) going to become a Winners Or a Loser Since it's IPO Debut
Written by Wally Olopade on June 6th 2017
                Fig 1. Shares of Square (SQ) Went Public - IPO - In November 2015

I was once told IPO stocks are too risky of an investment because they are not seasoned stocks.  Yet, Square (SQ) has returned over 100% since it's IPO and Alibaba (BABA) has returned over 50% since it's IPO. 

What is the difference between the winning IPO stocks that become the next Facebook (FB), Amazon (AMZN), versus those that become total flops like Twitter (TWTR) and FitBit (FIT); the latter causing traders to make comments such as those in the first sentence above.

We can talk about what an IPO is, but I'm not going to do that here.  We can talk about how to value an IPO, but nope, I won't discuss that.  We can talk about the underwriting process and who gets early shares or who does not, but I will leave that for the fundamental analyst.  

What I am going to discuss however is the concept of distinguishing which IPO stock has the potential to become the next big winner like Facebook vs which one is going to flop like Twitter. 

In 1997, Amazon (AMZN) went public.  At that time, it would have been difficult to tell whether or not Amazon was going to become a success or not.  Now everyone looks at AMZN and say I wish I held on to AMZN stocks when it went public.  

This same type of thinking is what prompted me to do my research on IPO Stocks. I focused my research strictly to just chart patterns.  That's right...ONLY CHART PATTERNS.  

I completely ignored anything outside of chart analysis for two reasons: 1. I wanted to see something visual and consistent no matter which IPO stock I was analyzing. 2. Fundamental analysis would have taking way too much time, a luxury I could not afford.  

My goal was to simply determine a pattern easy enough to see and consistent enough to increase my chances of identifying the winning IPO stocks and dumping the losers.

What I found out and later revealed in part 1 of my two part video called "Secret To IPO Stocks That Double In Price Part 1"  was that every single IPO stock that ever became a winner displays a unique pattern on their chart right before they began to double, triple, quadruple, quintuple and more in price. 
                           Fig 2 Monthly Chart of Square (SQ) June 2017


I devoted painstaking hours to analyzing the charts of over 2,700 stocks that went IPO from the years 2000 to 2016.  And Square (SQ) is displaying that exact same pattern that took stocks like Facebook (FB), Amazon (AMZN), Netflix (NFLX), Tesla (TSLA) to become the great companies we all know them to be today.  

I've been told that trading IPO stocks are risky.  One person put it to me this way  when I invited people to the very first workshop where I was going to reveal my discovery; he said to me "Thanks but no thanks on the IPO program.  I feel there's enough risk on seasoned stocks."  

Looking at the chart of SQ above, this doesn't seem like a stock that was risky.  Plus the good news is that there's more room for the shares of Square (SQ) to more than double in price.  Find out why when you watch part 1 of my "Secret To IPO Stocks That Double In Price Part 1" 

For starters, I can understand why some traders see IPO stocks as risky.  The vast majority of IPO stocks end up becoming losers than winners.  But here's where my chart analysis began to pay off.  First what I did was instead of looking at these stocks from a day trading point of view, I switched to the monthly chart and approached it from an investor or investment point of view.  

What this did was it allowed me to see a bigger pattern that is oblivious to those who focus on daily chart patterns.  After all, there is so much volatility up and down during the day, but once you switch to a monthly time frame, things begin to slow down and a bigger and much clearer pattern begins to emerge.

This one switch alone, made me discover one of the biggest mistakes traders make when looking at IPOs.  And that is you gotta let the stock settle down first from all it's excitement.  But alas, that is probably the hardest thing for most traders because when a stock first becomes public, that's when it gets so much attention from the media.
                Fig 3. Monthly Chart of Square (SQ) Before It Settled Down


The stock of Square (SQ) took about 8 months to settle down before deciding whether it was going to become a winner or a loser.  This is very typical with IPO Stocks and one of the first steps to separating the winners from the losers.  I have found that the average length of an IPO stock to begin displaying whether it will be a winner takes about 6 months to 12 months.  

The lesson from this is that it is prudent to wait at least 6 months before jumping into an IPO stock.  What this will do is keep you away from the losers.  Almost all the charts of the IPO losers never recovered after 6 to 12 months.  And those that did went on to become big winners making up to 47,000% returns.
                Fig 4. Monthly Chart of Square (SQ) After It Settled Down

Square (SQ) has shown that same recovery and is well on it's way to making double it's returns for its investors.  Today alone, as of this writing June 6, 2017 at 3:00 p.m. New York Time, the stock of Square (SQ) is up 3.93%.  I don't need to know what the news is that is causing the spike in price.  

Whatever the news is, Square (SQ) is displaying the exact same pattern that took IPO stocks like Facebook, Amazon, Netflix and the like to the great heights they achieved.  Contrast that to a company like Twitter (TWTR), FitBit (FIT), GoPro (GPRO) and more, they never recovered after their "PROBATION" period.  

But there are other chart patterns that separate the winners from the losers such as the exact pattern that tells you when it is ready to start going up as well as what indicators actually confirm the BIG MOVE is truly beginning.  

I cannot cover all the amazing patterns that can be clearly seen with the winning IPO stocks in this little article.  But suffice to say, Square (SQ) has displayed many of the patterns of IPO stocks that become the winners and it is a stock that has the ability to more than double in price over the years.  And right now, it is well on it's way to doing just that.

To learn more advanced research about SECRETS TO IPO STOCKS THAT DOUBLE IN PRICE visit https://rightsidetrading.com

RELATED NEWS: 

Alibaba (BABA) was featured as an IPO stock ready to double in price (click here to watch the video).  So far it is on its way up as it has rallied +50%.

Alibaba (BABA) was also our #1 pick in our IPOs Monthly Review For Members Only for the month of June 2017.  To find out more click here.

About Author: Wally Olopade

Wally Olopade has been trading the stock market since 2013 and has extensive knowledge on technical analysis and has used this skill to simplify learning how to read the chart of any stock. He has used his chart reading skills to anticipate great market moves such as the crash of August 2015, the post Brexit rally June 2016, and the post U.S. Election of Nov 2016 rally all within 2-3 days before those great moves began. In Oct of 2016, he detailed his observations of the US Market making ALL TIME HIGHs which were recorded and posted on YouTube in both months respectively before the market did indeed reach all time highs. He also anticipated great stock moves from stocks such as Disney, Apple, Goldman Sachs and more. Wally has been featured on Yahoo Finance, Benzinga and many more media outlets
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