As we’ve talked about, IPOs/new stocks are great places to look for potential big winners.
And we had a situation like that way back in 2023 on COIN (Coinbase).
COIN has come under fire many times for its Bitcoin-based business and people find crypto in general to be polarizing.
And COIN has definitely been in the news for its horrific performance of late.
But that misses the big picture.
We know that we like to trade the first possible entry after a stock starts trading. We like it even better if that stock falls mightily and gets below the 12-month simple moving average (once that average has enough data to show up on the chart).
COIN did exactly that.
Then we like to wait for the 2nd consecutive close above our 12-month SMA for the entry.
COIN did that, too.
Here’s the monthly chart:
The entry would’ve been in July 2023 and we’d just be getting ready to exit at the end of this month.
Even after a huge drop the past few months, our hypothetical entry would’ve been at $73.20 and our exit, as of right now, would be at $164.64.
That’s over a 120% win.
There’s no guarantee new stocks will shoot up like COIN did.
But new stocks can definitely outperform.
Happy trading,
— Scott Welsh
