Eve Boboch of Roppel Capital Management joined the Investing with IBD podcast this week to discuss current market conditions and lessons she learned in 2020. Plus, we take a look at several IPO stocks that are Covid reopening plays: Airbnb (ABNB), Uber (UBER) and Bumble (BMBL). Airbnb stock and Bumble stock are some of the newest Nasdaq names hoping to blast off on pent-up demand for their services in the coronavirus economy.
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Dow Climbs Amid Tech Sell-off; IPO Stocks Building Bases
The Dow Jones Industrial Average fell to slightly negative territory in the stock market today as the Nasdaq sharply sold off thanks to a rise in Treasury yields. The S&P 500 and Russell 200 also retreated.
Apple (AAPL) and Tesla (TSLA) tumbled in Thursday trade. The tech-heavy Nasdaq managed to close above its 50-day moving average the first three sessions of the week, but holding that key level is proving to be an ongoing battle.
“If you look at just growth stocks, you’d think that we just went through a bear market,” Boboch said. But she identified the upside reversal on March 5 as a step in the right direction for the Nasdaq and growth stocks.
“The Nasdaq did get support at the 100-day moving average,” she continued. “So I think the jury’s still out if this correction in growth names is over.”
Several IPO stocks were on the move as well, with Upstart Holdings (UPST) doubling in Thursday’s trading action to hit an all-time high of 124.75. Recent gaming IPO Roblox (RBLX) fell 8% to 69 Thursday, but has made a fairly strong showing since its NYSE debut last week at 45.
How To Become A Better Trader
In addition to the current market, Boboch also discussed methods to become a better trader. She identified three main areas to build and maintain an investing skill set: networking, mentoring and the “ride the wave” plan popularized by the CAN SLIM style trader Jim Roppel. Boboch explains that Roppel’s guidelines help her hold a stock that is making a big move.
“What I set for myself is to have a minimum cutoff in terms of how I will reduce the core position when I’m trading what I believe is a high conviction, early life cycle potential big winner,” Boboch said of her trading rules for Tesla and other stocks. “We’ll see how that works this year for me.”
Listen to the full podcast to hear Boboch’s trading lessons and tips for building a better trading mindset.
IPO Stocks To Watch Post-Covid
Finally, Boboch went over several stock ideas in the Covid reopening theme, including popular IPO stocks: Airbnb, Uber and Bumble stock.
One IPO stock on Boboch’s radar is Airbnb. The vacation rental platform made its Nasdaq debut last December at 68. Boboch believes Airbnb stock will be a strong reopening play as coronavirus restrictions lift amid the global vaccine rollout.
“With Covid still not completely gone, people may feel a little bit better booking a home for their next vacation versus staying at a hotel with a lot of people,” Boboch said. “This company also is on the disruptive side … so I think there is a story there.”
Airbnb stock broke out of an IPO base in January, clearing a 175.07 buy point. But like many IPO stocks, Airbnb took investors for a wild ride out of the base. Shares made a volatile advance for six weeks before pulling back to the 50-day line. Airbnb stock was able to find support at that key level. Boboch is eyeing the formation of a short consolidation.
Another bullish signal? Airbnb boasts growing institutional support.
“If you look at (Airbnb stock) on a weekly chart, it was under accumulation,” Boboch said. “Someone large is in there buying and taking a position in this name.”
Uber stock is another reopening play to watch. The ride-hailing giant has seen improved price performance as of late thanks to a relaxation of coronavirus restrictions. Boboch also believes Uber’s recent acquisition of the Drizly alcohol delivery service will boost the company’s bottom line.
“It’s advancing,” Boboch said of Uber’s recent price action. Though she notes trading ranges have been a little messy, she believes Uber stock’s ability to hold support at the 50-day moving average is a bullish signal.
Uber stock has seen some volatile action since the beginning of the year. Shares broke out of a cup-with-handle base with a 38.62 buy point on Nov. 4, several days before earnings. Uber stock then advanced to the 60 price level before pulling back to its 10-week line in late January.
“Uber has been chugging,” Boboch continued. “It’s not one of the most powerful names off the bottom, but it didn’t correct as significantly as some of the other growth names.”
A final reopening play for investors to analyze is Bumble stock. The dating platform is one of the newest additions to the Nasdaq composite. Shares debuted on Feb. 11 at 43. Bumble stock now is forming an IPO base with an 84.90 buy point. Investors also could use 76.59 as a potential aggressive entry.
“It is still forming an IPO base,” Boboch said of Bumble stock’s price action. She noted that so far the stock’s technical action has been constructive and the company fits within the Covid reopening theme.
“They have a different angle from their competitors,” Boboch said. “So it could do well. But some stocks that IPO go through a failure rather than advance.” That means Bumble is still in the watchlist pile rather than the actionable pile.
Interested In IPO Stocks?
If you’re looking for the next top IPO stocks primed to make big moves, check out IBD’s Stock Lists page. To get IBD’s real-time assessment of names like Airbnb stock and Uber stock, check out IBD’s Stock Checkup page.
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