Here’s a continuation of yesterday’s trade idea on $CAVA – July 12, 2023
Dan Fitzpatric, StockMarketMentor.com. CAVA ( NYSE: CAVA ) is looking pretty good today. A lot of the other stocks that have been working really well are resting, this one, not so much.
Now, if you didn’t catch my Free Chart of the Day video yesterday you might want to go back and review it. Because what I was teaching was my IPO strategy that really, really played out perfectly today. The idea was, in a nutshell, right when a company first goes publicly there is typically going to be some enthusiasm for the stock, though, I have seen it the other way around.
So CAVA ( NYSE: CAVA ) hits this enthusiasm high, where the last of the initial buyers buy all the stock that they want. And then at that point the stock retraces on either profit taking or selling from the first folks in the door, stuff like that. And so you will get this, kind of big move up and then consequently, a big move down.
It could happen on the first day, which this did. Sometimes this will go up for a few weeks or more. But then finally, at some point in time, at some price level, the stock peaks, and then it starts pulling back.
And so there are all kinds of trades that you can make in here but this isn’t what I am talking about. I am talking about when the stock ultimately surpasses, this, what I call enthusiasm high. I had drawn this line yesterday, that was simply right at the top here.
And my suggestion was, that you avoid this stock until it broke through this 47.89 level. For the simple reason that there’s not really that much advantage in getting into the stock early, anticipating a breakout here. Because it was resistance before, maybe this is going to be resistance again.
I had drawn this kind of box yesterday saying that you really need to see it go up above this line. This is 47.89, we will look at this on an intraday basis and you will see, right off the bat this morning, by the end of the first hour, right here at 10:15 the stock broke through there and meandered around for only a moment. And now it is up substantially from that.
So I would just stay long. If you are long this stock I would stay long, you’re good. We could see a really, really good run in this stock from here as traders see what’s going on and they want to get in on the action. And then at that point, they are off to the races, they are going to stay long.
So this is this IPO strategy playing out, effectively, in real-time. And so now, your biggest challenge is to hold this stock. Because it is likely to be fairly volatile, a lot of up-and-down intraday moves. But as long as you see the stock closing close to its intraday high, this is a stock that you want to buy because everybody else is.
So just honor your stops, respect your money, and don’t be gambling. Instead, be a risk manager and I think you are going to have a bigger risk in not owning this stock than you are owning it.
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