Yesterday we highlighted the huge gains that the Bloomberg IPO index has seen over the last few months in this post. Below is a look at the index using our trading range charts. The first shows the action of the IPO index so far in 2016, while the second goes back further to the start of 2013. At the moment, the index is extended more than two standard deviations above its 50-day moving average (the top of the red zone), which is considered extremely overbought. As you can see in the longer-term chart, though, the index still has a ways to go to get back to its 2014 highs. Breaking above the top of its downtrend channel was a good first start, though.
Another group that has recently made a new high is the Internet group. Below we show trading range charts (2016 and since the start of 2013) for the Nasdaq Internet Group similar to the charts of the Bloomberg IPO index above. As shown, the Nasdaq Internet Group isn’t quite as overbought as the IPO index at the moment, but it has already made up all of its late 2015/early 2016 declines. Within the last two weeks the index took out its prior highs.