Actions to buy and watch: Leader in Shopify-backed software envisions rare point of purchase


The choice of stocks to watch for Tuesday’s IBD 50, Global-E online (GLBE), is rapidly approaching a point of purchase in a rare graphical configuration. The leader in Shopify-backed software rose more than 3% on Tuesday at noon, extending Monday’s 7% gain.


Stocks to buy and watch: Global-E online

Global-E Online, based in Israel, offers a software platform to enable and accelerate global, direct-to-consumer cross-border e-commerce. The platform was designed for international buyers to shop seamlessly online and for merchants to sell to and from anywhere in the world, as recommended by the company. IPO filing.

The company debuted on May 12, priced at $ 25 per share. Before the IPO, Shopify (SHOP) acquired 7.75 million shares of Global-E Online – more than 5% of the capital – and created a service and partnership agreement which made Global-E the exclusive provider of cross-border services for clients of Shopify. Turnout fell to 5.4% after the start of the action.

In the last quarter, Global-E Online lost a dime a share on revenue of $ 46.2 million. While profit growth was stable year over year, sales jumped 134% from the same period last year.

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Software leader’s IBD stock quotes

Global-E Online ranks 5th among MICI 50. (The IBD 50 is a list of top growth stocks with strong relative price strength and blue chip fundamentals.)

The stock has a low EPS rating of 41 and an average C SMR rating, according to IBD Inventory Check. The earnings per share rating tracks the strength of a company’s earnings. The SMR rating analyzes a company’s sales, margins and return on equity and offers a rating from A (best) to E (worst).

IBD Stock Checkup also shows that Global-E Online Stock shows a moderate IBD composite rating of 81 out of a perfect 99 rating. The composite rating – an easy way to identify the most important growth stocks – is a blend of key fundamental and technical metrics to help investors assess strengths of a title. The rating would likely be higher without the fact that the company does not have a history of long-term earnings growth, which is common with new issues. The business became profitable in 2020.

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GLBE Stock is considering a new point of purchase

Following the stock’s debut, GLBE stock rose more than 152% from the closing price on May 13, the stock’s first trading session. For GLBE stock, the new buy point is 64.60, but there are several interpretations of the stock price action.

First, the stock’s post-IPO price action falls under a tight and rare flag. The high tight flag forms when a headline increases from 100% to 120% in four to eight weeks. The stock then corrects by 10 to 25% in three to five weeks. The ideal point of purchase is the highest of the flag plus 10 cents.

Second, investors might interpret the current stock as an unusual IPO basis. Normally, IPO basics begin within 25 days of the stock’s first day of trading and before a long bullish move. GLBE’s first base begins approximately two months after the IPO. However, given the strength of the stock, it makes a lot of sense to find an entry with optimal risk and the stock fits the basic parameters of the basis of the IPO: the first brief period of consolidation of a new issue.

Finally, you can just think of the current action as a short consolidation. The action takes a short break after a prolonged bullish move. A breakout to new highs would signal that the stock’s move may not be over.

In all three interpretations, the new buy point is the same: 64.60.

Positively, the stock’s relative strength line shows tremendous strength with a steep upward angle, a sign of huge market outperformance. The RS line is expected to hit a new high again on or shortly after the breakout to reaffirm the title as the market leader.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the stock market.


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