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3 IPO Stocks That Are Down But Not Out

The charts show the makings of a much happier new year in these IPO stocks

Source: Shutterstock

A new calendar year can mean a fresh start. And when it comes to three of last year’s bigger IPO stock disappointments, Lyft (NASDAQ:LYFT), Beyond Meat (NASDAQ:BYND) and Pinterest (NYSE:PINS), might be down right now, but don’t count them out in 2020.

Some believe every dog has its day. And with investing there’s more than a bit of truth in that conviction. Even better, on Wall Street rotations into underappreciated or vilified stocks can sometimes turn into very large profitable opportunities as overly bearish sentiment does a complete about face. Recent IPO stocks under technical pressure in 2019 are an interesting group with this type of more meaningful potential.

Buying an out-of-favor IPO stock may not result in owning the next Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) or Costco (NASDAQ:COST). Still, younger, smaller capitalization companies typical of IPO stocks do hold this kind of longer-term possibility. Add in leadership in an emerging market with growth potential and the opportunity is increased. And combined with price action ripe for bottoming, you may not have an Apple (NASDAQ:AAPL) on your hands, but you’re off to a promising start.

IPO Stocks to Buy: Lyft (LYFT)

IPO Stocks to Buy #1: Lyft (LYFT)

Source: Charts by TradingView

Rideshare operator Lyft is the first of our IPO stocks to buy. A late October earnings report drove home the point LYFT stock has what it takes to succeed in this new growth market. The company delivered record-beating revenues, toppled consensus earnings forecasts and issued upwardly revised top and bottom-line guidance.

Now this IPO stock has pulled back into a technically supportive area for buying on weakness. Shares are currently testing the 62% retracement level after a post-earnings rally broke LYFT stock’s lifetime downtrend resistance line. But with stochastics in an overbought position, I’m looking for a purchase near Lyft’s post-earnings doji-style hammer candlesticks.

LYFT Stock Strategy: Monitor this IPO stock for a weekly bottoming candlestick to form closer to the earnings low highlighted in yellow on the price chart. With support from the broken downtrend also coming into play around $40, setting a stop-loss beneath $39.40 to contain downside exposure on any future purchases makes sense.

Beyond Meat (BYND)

Beyond Meat (BYND)
Source: Charts by TradingView

Beyond Meat is the next of our IPO stocks to buy. The faux-meat disruptor sizzled past Street forecasts when it reported earnings in October. But an expiring lockup period and competition concerns got the better of investors and continues to hold its grip on shares. The good news entering 2020 is BYND stock looks ready to cook higher.

Technically, shares have worked their way into a solid-looking lateral price consolidation. The healthy congestion pattern is putting together a successful challenge of BYND stock’s opening week high and finishing price. This area could prove important as it preceded the IPO stock’s massive run-up in share price. My guess is there are now natural buyers residing in this area.

BYND Stock Strategy: Shares have just signaled a bullish stochastics crossover. That’s nice to see, however today’s advice is to wait for price confirmation that endorses this price area for buying. Given BYND’s volatile nature, my suggestion is to purchase this IPO stock above $81 and size the position to allow for a stop-loss beneath $64.50. And if BYND stock begins to really sizzle again, $120 – $125 is an initial price target for taking profits.

Pinterest (PINS)

Pinterest (PINS)
Source: Charts by TradingView

Pinterest is the last of our IPO stocks to buy. The wildly popular web-based visual discovery had a tough time maintaining Wall Street’s interest after a promising earnings-driven breakout this past summer. But with shares cut in half from their highs and modestly below their IPO stock price of $19, the PINS story is looking very attractive entering 2020.

At current prices this IPO stock now sports half the market capitalization of internet peers Twitter (NYSE:TWTR) and Snap (NYSE:SNAP). Moreover, PINS stock is still growing. Additionally, Pinterest has a similar active user base of more than 300 million, while offering a much stronger vertically integrated road map for sustainable growth.

As such, it’s time investors pay attention to PINS stock. And the price chart agrees. Technically, shares have put together a solid bottoming candle on heavier and above-average volume near a Fibonacci extension level and last quarter’s post-earnings drubbing. And with stochastics hinting at a bottom-in-the-making, Pinterest is nearly ready for buying.

PINS Stock Strategy: Buy this IPO stock on a move above $19.48, which confirms the weekly chart’s highlighted bottoming candlestick. Set a stop beneath $17.15 to prevent larger losses if new lows are in the cards. But if PINS finds Wall Street’s favor once more, $26 – $27 looks like a respectable spot to show your appreciation for taking profits.

Disclosure: Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.


Article printed from InvestorPlace Media, https://investorplace.com/2020/01/3-ipo-stocks-that-are-down-but-not-out/.

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