IPOs – Talecris Biotherapeutics-TLCR

Lately, I’ve been talking a lot about the hot IPO market, and today I want to tell you about the next great IPO trade.

Talecris Biotherapeutics (TLCR), a biopharmaceutical company that specializes in plasma-derived protein therapies, went public on Sept. 30, raising a whopping $950 million.

In early November, the IPO received a slew of upgrades:

• Barclays Capital initiated “equal weight”
• Citigroup initiated a “buy”
• Wells Fargo initiated “outperform”
• JPMorgan initiated “overweight”

Since it began trading, the stock’s chart has formed a bullish cup-and-handle pattern.

The pattern includes an elongated U-shape followed by a short period of consolidation of one to two weeks in duration, which tends to be downtrending.

The pattern is similar in appearance to a coffee cup with a right-side handle, and indicates the potential for an uptrend.

If the price ascends outside of the trendlines, then it has the potential for breakout. If the price ascends beyond the upper right side of the cup, then the pattern is confirmed, particularly if it is accompanied by a sharp increase in volume.

See full-size image.

I see TLCR breaking out soon, and the play here would be the TLCR March 25 Calls (ZQTCE) on any pullback in the stock, especially if we see it dip to the $20 level.

Related Articles:

• Why You Want to Invest in IPOs NOW!
• The Right Way to Invest in IPOs
• 5 Ways to Tell a Stock is Headed Up

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