HLYS – Heelys Inc IPO Skates Higher

Not a week goes by lately without a hot IPO hitting the street. This week was no exception. HLYS – Heelys, Inc. began trading by opening at $30.30., a pretty premum to it’s $21 offering price. Of course I looked for an opportunity to use my online trading skills to take some cash from the stock. This trade was a tough one though.

The eight point swing in price, in the first 5-minute candle, set up some decent volatility. I would have preferred a smaller range though. To lessen the erratic price swings, I chose to watch the 15-minute chart for a suitable trading pattern. HLYS pulled back as expected. It didn’t really give the best entry though. You’ll see it’s similar to the opening day trade in the RRST IPO, but the large first 5-minute bar in HLYS makes it difficult. I would have liked the 7th candlestick to close lower, and take a trade over it, placing a stop below. It closed a little too strong, and the trade actually was set in motion over the 9th candlestick. I ended up not taking it because I felt it was too risky. I didn’t want to use .40 as R, which was the width of the 9th candlestick. I also thought a stop below the 7th candlestick would be too wide.

The trade would have been ok. That’s about it though. Just ok. Maybe I hesitated, and should have banged it. If the stock had continued rising, I’d be writing something completly different for sure. Most of the trades I’m seeing in this market have been like that lately. It’s a choppy market. If you can find stocks with relative strength such as FFH, or HANS, I guess you hold on, or add to the breakouts. I find that type of trading difficult.