Is it aboutt party time for Party City (PRTY)? (May 16, 2015)
In this video I want to look at Party City ( NYSE:PRTY ). This is it; the stock just started trading in the middle of last month so it’s been about a month. This is the type of setup that I like to see in order to go long, I’ll go through it. The first day the high was up at 20.84, and then the next day was when it really set, what I would call, the enthusiasm high where everybody’s got to get this. I remember CNBC covering it, really this day, and then I think the next day they just said, “Hey, Party City ( NYSE:PRTY ) closed up another 4 percent, lets have a party.”
But this is the high here at 22.14, so the stock traded below that and then ultimately broke above this high of 22.14 but couldn’t hold it. Then on Friday, big wide-ranging day, big swinging day, I think this was probably the widest range that this has traded in a while, if at all. So how are you going to trade this stock? First of all you can wait for the stock to go above 22.60 and then you buy it with a fair degree of confidence.
Do you know why? Because every single person who’s owning this stock is a winner, so nobody’s looking to get their money back and selling to avoid taking a loss. The only way they would be selling is to take their profits off the table. When you’ve got a stock like this, you know, it hasn’t really pulled back and given anybody a real good time, a perfect time to enter, you’re not going to have that many folks, maybe insiders, but I don’t know when the lockup is on that. You’re not going to have anybody with really big profits that is going to be apt to sell this stock as soon as it breaks out.
So my point is this: you buy this thing here on a move above 22.60, or buy it on any kind of a pullback here, right? So you can buy it on any pullback. But here’s another way you can look at it, I do this a lot on new IPO stocks: look at he hourly chart and you can see that there was a lot of activity here, a lot of activity, much more than here. You can see the volume bars here. Where are the high ones, the red ones or the green ones? Obviously the green ones here, so this is a stock that’s under accumulation.
When I look at the daily chart I see just this resistance over the last few days. But when I look at the hourly chart I see support right down here. Resistance here, support here at 21.40, so when I look at this stock now risk really is just about that much, it’s just not that high of a risk to be buying this stock right now. So I want you to consider this, consider the wide range during the day, you may be able to get this stock on a dip, I’m sure you will, because it is volatile during the day. So watch it on an hourly chart, you can even watch it on a 15-minute chart and really get a better entry.
Free Chart