Yesterday we posted charts showing the recent underperformance of the Bloomberg IPO index due to weakness in Alibaba (BABA), which has a 44% weighting in the index because of its massive size.
While BABA has been trending lower and dragging down the performance of the Bloomberg IPO index, there are plenty of names that have done well and still look attractive based on their technical chart patterns and momentum trends. While the cap-weighted index is down 9% YTD, the average stock in the index is actually up 6%+ on the year.
So many of these companies have yet to generate earnings, and their success is dependent on their ability to meet forward growth targets. Because of this, in the early stages of IPOs, things like investor interest, momentum trends and technical analysis are more helpful in finding attractive set-ups for short-term and intermediate-term trades. We recently analyzed the chart patterns for all 214 members of the Bloomberg IPO index to identify the ones that we think look the most attractive here. Below is a table of the 30 names that currently look the best. We also provide charts for each stock listed in the table.
There are a lot of intriguing companies in the table below, and instead of using this as a basket “buy” portfolio, we urge you to explore each of the companies and what they do. If you like the business model and outlooks for any of them, you have the backdrop of an intriguing chart pattern to go with it.
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