Here’s your trade on Priceline (PCLN) (May 08, 2014)
Discussed in this article: Priceline.com Inc. ( $PCLN )
I want to look at Priceline ( NASDAQ:PCLN ) here. This is not good, this is not the right price here, I don’t care what William Shatner says. Here’s the deal, the company misses its numbers, it was down really bad this morning. I woke up and went, “Awesome!” So the stock opens up here, trades down a little bit, and then ultimately moves higher, great, back above the 200-day moving average, perfect, back above yesterday’s close, perfect, looks good, rejection of the breakdown below the 200-day moving average; maybe this is the beginning a something fine, right, right out of Jackson Browne’s catalog; but instead it fell lower again.
What I was just describing is, anybody who looks at charts, that’s what you’re going to be looking at, unless you’re just like bearish on Priceline ( NASDAQ:PCLN ), or bullish on Priceline ( NASDAQ:PCLN ), I just want to buy it. But if you’re really looking at the charts this is what you’re looking at, you’re looking at the decline, you say, “Okay whatever”, you’re saying, “A test of the 200-day moving average; Great!” You see this trendline here, you see the consolidation; by the way, you see the broadening triangle and all that, you see the move higher and say, “Gosh, I guess it just got a little ahead of itself here.” And then finally you see this test of the 200-day moving average yesterday, but you know that’s no good, you know that doesn’t matter because the company is announcing earnings before the opening today and it trades down here.
So with the stock trading up you can bet that a lot of folks are saying, “Well this is my buying opportunity, I’m in, as long as this stock is above, what’s our 200-day, 1200.00, 1120.00, you’d say 1121.00, but whatever.” So the stocks up above 1120.00, you’ve got bulls coming out of the woodwork saying, “This is my buying opportunity, look at the weekly chart, a nice pullback here, a rare one, maybe this is a good time to buy.” Well again, reject it. The stock now is down 6 percent over the last week, right, 2 percent just today, but a decisive move lower on volume.
So my suggestion would be, you don’t want to own Priceline ( NASDAQ:PCLN ) period, you just don’t; sell it, you can always buy it back at 1108.00 sometime later in the future. Sell it, it’s going lower, I don’t know how low it’s going to go, that’s not for me to say, I can guess and then pretend like I know, but that’s not good either. The bottom line is this: if the stock gets up any higher, like if it happens to rally higher, just know that this volume means something, this is important, and it’s going to be important in the days and weeks to come, you’re going to look back on this and say, “Oh, that’s right, Fitzpatrick said this was a big bearish day on big volume. Here I got snookered by somebody was pounding the table saying this was a great opportunity to buy Priceline ( NASDAQ:PCLN );” if you want to do that that’s fine, but if you want to make money get out of this stock.