Don't Ignore This Chart!

This 2018 IPO Just Carded A New High. Now What?

 | 

Cardlytics (CDLX) made its initial public offering a little over a year ago. While it is not uncommon for a newly listed stock to take time to build a trading range, CDLX broke to a new high for the first time in a long time since September 2018. The relative strength also soared to a new high today, which is very bullish. The volume has been surging over the last three days as the stock broke out to new highs. The question now is this: Should you jump on this stock?

Usually, after such a big push higher, I wait for a move like this to consolidate before taking a position in the stock. Notice that the PPO, a momentum indicator, is right near the top of the range it has been in. While the enthusiasm for the stock is roaring, it might be better to look for a place to enter when the stock pulls back. 

Cardlytics helps banks manage their loyalty reward programs. As companies continue to hunt for ways to keep hold of their clients, loyalty programs have been one method. While they are not foolproof, the programs do help maintain customers.

The range of the chart goes from $10 to $30, a 200% move off the lows, so there is lots of movement. It is best to keep that in mind when investing in a breakout trade that has been shooting vertically and is a double since May 1. While it looks like they have something working, I would wait for a better entry, but will definitely add it to the watchlist.

Good trading,

Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts For Dummies


Want to stay on top of the market's latest intermarket signals?

– Follow @SchnellInvestor on Twitter
– Connect with Greg on LinkedIn
– Subscribe to The Canadian Technician

Announcement from the Author

{{ announcement.content }}

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. Based in Calgary, he is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the Market Technicians Association (MTA) and the International Federation of Technical Analysts (IFTA).

Greg is also the co-author of Stock Charts for Dummies (Wiley, 2018). Greg joined StockCharts.com in 2012 and has be instrumental in helping launch a variety of new blogs and other commentary platforms. Presently, Greg contributes market analysis commentary to The Canadian Technician, Commodities Countdown and Don't Ignore This Chart blogs. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus