IPO Stock Of The Week and specialty insurance leader Bowhead (BOW) fell back to a critical support level Friday and a decisive rebound would lead to a new entry. Bowhead is featured on Investor's Business Daily's IPO Leaders screen.

Bowhead focuses on underwriting casualty, professional liability and health care claims. It counts American Family Mutual Insurance as a strategic partner, and that firm is also an investor.

On Nov. 5, Bowhead said it earned 38 cents per share on sales of $116.8 million. Those were year-over-year increases of 41% and 53%, respectively. Notably, the firm boasts average quarterly sales growth of nearly 58% over the past five quarters.

"Premium growth in the quarter was 32% year over year. Our Casualty division had a standout quarter, as we continue to see favorable underwriting and pricing conditions," said Bowhead Chief Executive Stephen Sills in the news release.

Sills continued, "We also experienced double-digit premium growth in our Healthcare Liability and Professional Liability divisions." And the company believes it is well positioned for sustainable and profitable growth across market cycles.

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IPO Stock Hits Key Level

Bowhead stock debuted on the NYSE on May 23, pricing at $17 per share. Shares closed the first day of trading at 23.80, a 40% premium to the IPO price. That's a sign of big institutional demand.

Following a brief uptrend, the stock carved a cup with handle with a 31.91 buy point. And on Nov. 6 the insurance leader topped that buy point in the wake of the company's earnings report, according to IBD MarketSurge analysis.

In early December, the stock rallied as much as 18.5% past that entry before pulling back to its critical 10-week line. That's a key support level to watch. A decisive rebound would place the IPO stock in a new buy area that starts around 33.93, the current price, with the stock at the 50-day line.

Conversely, a sharp breach of that level in heavy volume would trigger a sell signal, so keep a close eye on that technical indicator.

The IBD Stock Checkup shows that Bowhead stock boasts a strong 95 out of a perfect 99 IBD Composite Rating. That makes it a top IPO stock to watch in the current stock market.

Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on the Dow Jones Industrial Average and the stock market today.

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