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    Anchored VWAP IPO Beyond Meat

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    alphatrends
    The document discusses using anchored volume-weighted average price (AVWAP) analysis to summarize price action on initial public offerings (IPOs). It analyzes the IPO of Beyond Meat on its first few days of trading, noting how the stock pulled back to support at the IPO AVWAP on the first day and found buyers at the AVWAP on the third day. On a later date, breaks below successive anchored VWAP lines indicated increasing selling pressure and bearish control of the stock's price.

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    Anchored VWAP IPO Beyond Meat

    Uploaded by

    alphatrends
    2K views5 pages
    The document discusses using anchored volume-weighted average price (AVWAP) analysis to summarize price action on initial public offerings (IPOs). It analyzes the IPO of Beyond Meat on its first few days of trading, noting how the stock pulled back to support at the IPO AVWAP on the first day and found buyers at the AVWAP on the third day. On a later date, breaks below successive anchored VWAP lines indicated increasing selling pressure and bearish control of the stock's price.

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    An example of trading IPO trading using the Alpahtrends Anchored VWAP

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    The document discusses using anchored volume-weighted average price (AVWAP) analysis to summarize price action on initial public offerings (IPOs). It analyzes the IPO of Beyond Meat on its first few days of trading, noting how the stock pulled back to support at the IPO AVWAP on the first day and found buyers at the AVWAP on the third day. On a later date, breaks below successive anchored VWAP lines indicated increasing selling pressure and bearish control of the stock's price.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2K views5 pages

    Anchored VWAP IPO Beyond Meat

    Uploaded by

    alphatrends
    The document discusses using anchored volume-weighted average price (AVWAP) analysis to summarize price action on initial public offerings (IPOs). It analyzes the IPO of Beyond Meat on its first few days of trading, noting how the stock pulled back to support at the IPO AVWAP on the first day and found buyers at the AVWAP on the third day. On a later date, breaks below successive anchored VWAP lines indicated increasing selling pressure and bearish control of the stock's price.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    Trading IPOs With The Anchored VWAP

    Brian Shannon, CMT

    Initial Public Offerings (IPO) of a stock are a unique opportunity to study


    price action from the inception of a stock as a publicly traded
    company.

    With a defined starting point to anchor a VWAP from, an IPO offers the
    purest look at supply and demand from a fixed starting point shared by
    all participants.

    As famed market timer, WD Gann once said: “if you know the ‘zero-
    point’ you can measure anything.”

    Unlike other indicators or oscillators, AVWAP data is useful right out of


    the gate as the stock begins trading.

    There is no waiting for a 10, 20 50 day moving average, we can anchor


    the VWAP from the very first candle and find useful information.

    The next few charts will use AVWAP analysis in shares of Beyond Meat
    (BYND) from the first day as a publicly traded company.
    www.alphatrends.net

    On May 2, 2019 shares of Beyond Meat (BYND) priced their IPO at a


    price of $25. Within the first couple of minutes of trading, it was up
    over 100%. Aggressive traders would have looked to the (purple) IPO
    VWAP as a place as potential support on a pullback, but the stock never
    pulled back that deep. One trick for VWAP on IPOs is to set the anchor
    from the 2nd minute of trading to exclude the large matching orders on
    the open. You can see the blue AVWAP was anchored to minute 2 and
    that is where the first pullback found buyers on day one.
    www.alphatrends.net

    On the third day of trading (May 6) in BYND, the stock opened (circle
    above) at the AVWAP from the IPO and immediately found buyers. The
    chart above uses 5-minute candles so the action can be cleanly viewed.
    Always try to use as short a timeframe as possible without the chart
    getting “scrunched up” and difficult to see any real detail.

    .
    www.alphatrends.net

    This final chart of BYND from 11/22 shows several important events.
    Starting with the blue IPO AVWAP in May (1) you can see that prior to
    the large breakdown in October, there were three (circled) times when
    prices dropped below the IPO AVWAP. The first (1A) and second (1B)
    breaks occurred when the AVWAP was still rising, which gave us a
    reason for caution but not to get bearish. The third (1C) break occurred
    in late September and this time the AVWAP had flattened out, which is
    a real reason for concern. The purple AVWAP (2) was anchored after
    the large gap in June. Initially, this AVWAP provided little value as
    prices oscillated above and below it. After prices closed below the June
    AVWAP (2A), notice how it then acted as resistance in late August (2B),
    this was a real danger sign as the average participant from the June gap
    was losing money and the average short was now in a profitable
    position. Once AVWAP (2) acted as resistance, it was safe to anchor a
    third VWAP (3) from the prior peak. Prices stayed below this AVWAP
    through the end of the time studied. The black (4) VWAP was anchored
    from the September gap. Notice how quickly this gap failed and then
    AVWAP 4 acted as resistance during the October decline. The final (5)
    VWAP is anchored from the October gap down. With the stock below
    all of the declining AVWAPs, this stock is clearly controlled by sellers and
    buyers will have a lot of work to do to regain the upper hand.

    www.alphatrends.net
    twitter @alphatrends

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