Watch CTrip (CTRP) at a key inflection point.
Discussed in this article: Ctrip.com International Ltd. ( $CTRP )
I want to look at Tripadvisor ( NASDAQ:TRIP ) here. A lot of the internet stocks have been rolling over, Tripadvisor ( NASDAQ:TRIP ) is actually doing really well so we want to check this out. The stock is right at support, we can get, let’s just say, we can get really super precise in connecting these lines, but it doesn’t really help us much. So we just basically draw a trendline up here, connecting the dots for the most part, draw another one up here, and what do we have? We’ve got a few different times when the stock has drifted all the way back to test the line. It’s done it a whole bunch of times to first establish it, and then test it, test it again, and now where are we?
We are at a critical juncture right here, because if this trend is to continue, and look at how far this has gone, it’s gone from between 35.00 and 40.00, whatever, clear up to $90.00. So it’s done well over a double, we could say almost a triple at some point. But the bottom line is, this is gone a long way, has it gone too far too fast? Who am I to say, you’ve got to look at the chart for that. Here’s how we’ll figure it out; as long as the stock stays above this level, 78.67, lets just call it $78.00 or so, as long as it stays above that level then I think this is good to go.
But if it doesn’t, if it starts drifting lower I think you really want to be taking profits on this stock. I’m not really sure that I would short it, because the stocks in an uptrend and typically you can’t tell the difference between tops and high bases that turn out to be consolidations until after the fact. But we’ve got a lot of trading that’s gone on here, so if this stock does start to fall further, this is potential support here, so this is what I’m saying; I’m not necessarily sure that I would short this stock, but if it starts falling below this level don’t just buy it or just hold on to it assuming that this support here is going to hold, because what if it doesn’t?
You’re holding here okay, I bought it at 81.00 now it’s at 75.00, but oh, this support will hold. Okay, well it’s not really holding, but that’s okay, the 200-day moving average will hold, and Lord knows how relevant that’s been, oh, not. So then it’s down to 70.00, and now what are you doing? Well now you’ve taken almost an 11-point loss on a stock and you’re not feeling too good about it, and now you’re trading hope strategy, you’re just hoping that this stock finds support. Meanwhile, some of its buddies in the same sector are not really doing that well right now.
So this is one of these stocks that’s kind of going against the grain in that it is still trending higher, but Friday, this is kind of a little bit of a shot across the bow. So like I said, if the stock stays above this level then it’s all good. But you cannot discount this little move below the 50-day moving average, and then a real weak rally, I mean this thing just isn’t really doing much of anything, so I just want you to be careful with this.