Don’t Buy Priceline (PCLN). Buy Priceline right!
Discussed in this article: priceline.com Incorporated ( $PCLN )
I want to look at Priceline ( NASDAQ:PCLN ) today, here’s why; the stock closed at an all time high, that’s a good thing right? We love when stocks close at an all time high, unless we don’t own them. So is tomorrow the time to be buying this stock? I would say no.
I would suggest that you split your trade up into two distinct things. One is the decision, and the other is the action. In my view the decision starts here, you look at the weekly chart. Is this a stock that you want to own? Sure, I wish I’d owned it from there, but that’s not the case.
When you look at this do you say, “Well golly gee, this is the absolute top. I do not want to own Priceline ( NASDAQ:PCLN ) because I think its peaking at $1100.00.” If that’s the deal then if you’re consistent with that, great, you can be a millionaire. But the rest of us mere mortals have to look at the trend and think, okay it’s going to keep going.
Now I break it down this way, I look and see, these key buy areas have been down here, it’s about 65 points below where the stock is now, the key sell points, or just the top of the range, have been here. Every time the stocks gotten out above the upper Bollinger Band, except when the bands have been very narrow, reflecting very, very tight trading ranges, every time the stocks pushed out about the upper Bollinger Band it hasn’t been too long before the stock corrected; again, unless the Bollinger Bands are really tight.
Let me show you something here. Here these bands were pretty tight, the stock drifted up a little bit, out for a few days, then it kind of corrected, but it didn’t really correct it just stopped going up, but then ultimately it moved more. Similarly here, they weren’t super tight here, but they were tight enough to where finally the stock started moving higher.
And then what’s it do? Well it ultimately corrects. Other times, like this time, when the bands were a little bit wider, the stock had been in an uptrend, the stock pops up, and then it really gets crushed. Similarly here, pops up, didn’t get crushed, but it definitely corrected.
So now where are we? Well we’re three days in, tomorrow, Tuesday, will be the third day after a big two day move. Where? If it moves higher up out of the Bollinger Band, out of the top Bollinger Band, that would be an opportunity to sell. That would be an opportunity to take some profits if you happen to be buying down here, or just long period.
But as far as buying, no, we made our decision; we want to buy the stock, that was based here. Now we’re basing our actions on the daily time frame. Once this gets into a favorable position, i.e. closer to the 50-day moving average, then we’ll even go intraday to be a little bit more precise in our entry. So I would just say wait with Priceline ( NASDAQ:PCLN ).