Spotify Technology S.A. (SPOT) has a limited trading history but the company attracted the attention of Jim Cramer last night on his Mad Money show. Jim found its unconventional IPO or "anti-IPO" and recent earnings report appealing after it's pullback from the highs around $170. Let's see if the charts reveal any positive clues.
In this daily Japanese candlestick chart of SPOT, below, we can see some positive activity around the $150 level. In early April SPOT shows some resistance around $150 with upper shadows around that level suggesting some rejection of gains above that level. Now look at April 24 and you should see a lower shadow with the extreme low at $150. Monday was another day when prices below $150 were rejected by the close. Old resistance becomes new support on pullbacks.
In this Point and Figure chart of SPOT, below, we can see a balance of price activity above and below the $150 level. I can see roughly the same number of X's and O's above as below $150. I can also "eyeball" an uptrend with higher lows at $138, $144 and ideally $150.
Bottom line: I don't have a problem with recommending a trade on a new issue except for the risk. With limited price data I find that the suggestion of an appropriate sell-stop is a little problematic. Let's revisit SPOT in a few more weeks.