{"id":4346,"date":"2015-04-22T04:52:36","date_gmt":"2015-04-22T08:52:36","guid":{"rendered":"http:\/\/www.morpheustrading.com\/blog\/?p=4346"},"modified":"2022-04-06T15:05:02","modified_gmt":"2022-04-06T19:05:02","slug":"ipo-trade-shake-shack","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/ipo-trade-shake-shack\/","title":{"rendered":"How We Shook Out The Trading Profits In Shake Shack Stock ($SHAK)"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-4349\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2015\/04\/SHAK-300x225.jpg\" alt=\"$SHAK stock\" width=\"300\" height=\"225\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/04\/SHAK-300x225.jpg 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/04\/SHAK-110x83.jpg 110w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>In trading, when to &#8220;take the money and run&#8221; on a winning trade depends on whether the original trade setup (the reason for entering the trade) was a quick, momentum-driven swing trade\u00a0<em>or<\/em>\u00a0a core trade that is based on a combination of strong technicals and a history of high earnings growth.<\/p>\n<p>In the case of the <a title=\"3 top tips from a 20%+ gainer\" href=\"https:\/\/www.morpheustrading.com\/blog\/3-tips-winning-stocks\/\" target=\"_blank\" rel=\"noopener\">27% gain<\/a> we recently locked in with the $NXPI trade, it was a <em>core trade<\/em> that we held for several months.<\/p>\n<p>But this time around, we walk you through a purely momentum-driven setup instead, a trade\u00a0that\u00a0<strong>bagged\u00a0<a title=\"Find out more\" href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"nofollow noopener\"><em>Wagner Daily<\/em><\/a> subscribers about a\u00a030% share price gain<\/strong> in $SHAK over a 3-week period.<\/p>\n<p>Continue reading\u00a0to learn\u00a0how this stock entered our radar, and why we bought and sold when we did&#8230;<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/ipo-trade-shake-shack\/#Nightly_Process_For_Daily_Profits\" >Nightly Process For Daily Profits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/ipo-trade-shake-shack\/#IPO_Strong_Technicals_Explosive_Action\" >IPO + Strong Technicals = Explosive Action<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/ipo-trade-shake-shack\/#The_Entry\" >The Entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/ipo-trade-shake-shack\/#The_Exit\" >The Exit<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/ipo-trade-shake-shack\/#How_Long_Do_You_Like_To_Hold\" >How Long Do You Like To Hold?<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Nightly_Process_For_Daily_Profits\"><\/span><strong>Nightly Process For Daily Profits<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Our daily stock scanning process\u00a0is what keeps us in tune with the market, as the number of bullish chart patterns with leading stocks is one of the best indicators of the market&#8217;s true bullish momentum.<\/p>\n<p>Each night,\u00a0we run through several scans (using a combination of <a title=\"Sign up for the stock screener\" href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">our online stock\u00a0screener<\/a> and good ol&#8217; fashioned elbow grease) to search\u00a0for stocks and ETFs with\u00a0<a title=\"How to find the best basing patterns\" href=\"https:\/\/www.morpheustrading.com\/blog\/best-stock-breakouts\/\" target=\"_blank\" rel=\"noopener\">valid basing patterns<\/a>, which are then added to our internal watchlist to monitor for low-risk entry points.<\/p>\n<p>Specifically, there are 3 basic stock scans we run each and every night:<\/p>\n<ul>\n<li><strong>Combo &#8211;<\/strong> Scan for leading stocks trading near 52-week highs, with top -ranked fundamental and technical ratings (strong earnings and revenue growth).<\/li>\n<li><strong>Relative Strength &#8211;<\/strong> Scan for stocks that have made a strong advance over the past 6 to 12 months (a pure technical price scan with no fundamentals).<\/li>\n<li><strong>IPO &#8211;<\/strong> Scan all IPOs within the past two years, with an emphasis on those within the past 6 months, for bullish chart patterns.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"IPO_Strong_Technicals_Explosive_Action\"><\/span><strong>IPO + Strong Technicals = Explosive Action<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Although not many of the trade setups we detail in our <a title=\"Learn more\" href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">stock picking report<\/a>\u00a0are from the IPO scan, we always look forward to trading those stocks that eventually appear in the IPO scan because we have learned over the years that a\u00a0combination of an IPO with a bullish chart pattern leads to nice breakouts with a high level of reliability.<\/p>\n<p>About two months ago, $SHAK first appeared in our IPO scan and we first took notice of the price action as it set a higher low in late February,\u00a0while\u00a0holding the rising 10-day moving average.<\/p>\n<p>On March 12, $SHAK opened about 10%\u00a0lower due to a negative knee-jerk reaction to an earnings report, but buyers immediately stepped in and not only erased the intraday loss, but surprisingly\u00a0pushed the stock to a positive closing price!<\/p>\n<p>The result of that wild day of trading was the formation of a wide-ranged candlestick that closed above the prior day&#8217;s high on heavy volume.<\/p>\n<p>This <strong>bullish reversal candle was certainly a clear buy signal;<\/strong> however,\u00a0we patiently waited for a lower-risk buy entry to develop (because there wasn&#8217;t one at the time).<\/p>\n<h4><span class=\"ez-toc-section\" id=\"The_Entry\"><\/span><strong>The Entry<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>After a 3-day pullback (on declining volume) to the 10-day moving average (a bullish sign), we decided to list $SHAK as a buy limit or buy stop order (whichever triggered first was the one we would take) in the March 18 issue of <em>The Wagner Daily<\/em>.<\/p>\n<p>The daily chart below shows you how the chart looked when we bought the stock in mid-March:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/~rick\/\/charts\/2014\/150422SHAK1.png\" alt=\"$SHAK ENTRY\" title=\"\"><\/p>\n<p>On the morning of March 18, $SHAK &#8220;undercut&#8221; the prior day&#8217;s low and triggered our buy limit order at $45.10.<\/p>\n<p>Once again, buyers arrived on price weakness, enabling the stock to reverse and rally to close in positive territory and above the prior day&#8217;s high.<\/p>\n<p>As anticipated, price action followed through to the upside over the next few days, and quickly cleared the high of the wide-ranged reversal candle from March 12.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"The_Exit\"><\/span><strong>The Exit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>After a few weeks of consolidation at the $50 level, $SHAK exploded higher over two sessions, allowing us to sell two-thirds of the position into strength, <strong>netting a 29% price gain on the open<\/strong> of April 16:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/~rick\/\/charts\/2014\/150422SHAK2.png\" alt=\"$SHAK exits\" title=\"\"><\/p>\n<p>Although we sold on the open of April 16, it would have also been a good exit to have sold partial size on the prior day&#8217;s open <em>or<\/em> on the close of the second big up day as well.<\/p>\n<p>After such a massive rally in a short period of time, we made a judgment call to significantly tighten the stop on our\u00a0remaining shares, in order to protect the profits while still giving the setup a small bit of breathing room.<\/p>\n<p>Just a few days later, $SHAK triggered our stop for the remaining one-third of the\u00a0position, as it slipped below the prior day&#8217;s low (32% gain on the remaining shares sold that day).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_Long_Do_You_Like_To_Hold\"><\/span><strong>How Long Do You Like To Hold?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For a pure swing trader, selling into strength of an explosive move like this is usually the way to go.<\/p>\n<p>However, traders\u00a0who are comfortable with being more\u00a0patient with the action could alternatively have sold partial size (one-third to one-half of shares) into strength, then placed a very <em>wide<\/em> stop to hold the remaining shares longer.<\/p>\n<p><em>Did you catch this winning trade too? If not, <strong><a title=\"The Wagner Daily signup\" href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"nofollow noopener\">subscribe now<\/a>\u00a0<\/strong>to our nightly stock picking report to avoid missing out on our next big winner<\/em><\/p>\n<div class=\"cfmonitor\" style=\"padding-top: 30px;\"><center><script src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\" async=\"\"><\/script><!-- Footer of content - Large --> <ins class=\"adsbygoogle\" style=\"display: inline-block; width: 336px; height: 280px;\" data-ad-client=\"ca-pub-7565144363001883\" data-ad-slot=\"6017996961\"><\/ins><script>\/\/ <![CDATA[\n(adsbygoogle = window.adsbygoogle || []).push({});\n\/\/ ]]><\/script><\/center><\/div>\n","protected":false},"excerpt":{"rendered":"<p>While patience to hold winning stocks definitely pays off, there are times when the stock trades can be equally profitable, even when held for only a few weeks. In this educational analysis of a recent trade, see how trading an IPO with bullish chart pattern led subscribers to a 30% gain in less than a month. Here&#8217;s how we did it&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-4346","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=4346"}],"version-history":[{"count":1,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4346\/revisions"}],"predecessor-version":[{"id":11290,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4346\/revisions\/11290"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=4346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=4346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=4346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}