Tactically Trading a New IPO

$ARM

ARM 0.00%↑ began trading last week. I somewhat anticipated IPO, let me start by saying I have a fundamental bias on this one. I think the valuation was too high.

But I don’t trade fundamentals.

Here’s a 15 minute look. It’s very simple for me at this point. The horizontal black line is the price the stock began trading at, and the purple line represents the AVWAP from that point.

My fundamental bias has me looking for technical opportunities to short. In this instance, my expectation is that by either tomorrow or Wednesday we’ll be back at that AVWAP line. If the stock fades off there, I’ll be shorting. If it goes through there I’ll likely do nothing, but may consider a quick-strike long trade to catch momentum.

If I’m wrong, and it begins fading tomorrow, I’d be looking for a break below the initial open price to enter a short position.

Also getting CART 0.00%↑ tomorrow