The long, the short, and the in-between on Priceline (PCLN) (September 08, 2014)
I want to look at Priceline (NASDAQ:PCLN ). You can look at this a bunch or different ways, in fact this is one of the stocks that I featured in an article over on “Real Money Pro” earlier today. The stock’s really been in kind of a symmetrical triangle within a more profound uptrend. Typically these symmetrical triangles are viewed as continuation patterns, in other words, we expect that. What it’s kind of looking like is that we are getting that. So I’m just saying you want to be careful, but with that said, this is not that much of a pullback, I mean it’s a stinking $1200.00 stock and it’s had a heck of a move.
Let’s just look at it on a short-term basis. On a short-term basis on this chart, we’ll get to the daily chart in just a second, I’m just kind of looking at this general area as a lot of resistance, I’ll call it 12 maybe 1220.00 or so. If the stock starts rallying up to this level, all these hapless guys and ladies who bought up here, a lot of them are going to want to sell into it, because they realize that they were wrong on the trade; they want their money back. We look at the daily chart and you can see what I’m talking about, look at the spikes here in volume, down, big sell off, bigger sell off here on Friday.
My suggestion is that this is a short-term trading bounce, we put on a bull put spread this morning on Option Market Mentor and it’s up by 12 percent, not a big move, but one day, I’ll take a 12 percent move and I’ll trade everyday. But here I’m just looking at about 1220.00 or so as resistance on the stock, maybe 1230.00ish. I would suggest, certainly if you’re an options trader, consider a little trade to the long side, but notice that this is a stock that’s been under distribution for a while, it also printed a lower high verses this one. So this little one-day turn around is not like the mother of all buying opportunities, it’s just a little oversold bounce.
So if you get a chance, if the stock starts drifting higher and then it starts faltering around 1250.00ish, something like that, between 1200.00 and 1250.00 and then starts moving lower I think it’s actually a stock you can consider shorting as long as you have a pretty tight buy stop some place up here, like an “oops I’m wrong stop”. This stock has been going up for quite a while; do you really want to try to pick the top in it? I wouldn’t. Just know that a stock like this, that’s been going up for a while, is doing it for one reason, because there’s a lot of demand for the stock that’s pushing it up. Here it’s been drifting sideways for so long, kind of like it did here, kind of like it did here. It’s been drifting for so long that you just want to respect the uptrend.
However, in these boxes that I’ve drawn, how many nice shorting opportunities were there? There were actually quite a few even though the trend was prevailing in an upward direction. I would say be long-term, long long-term, bullish on Priceline (NASDAQ:PCLN ), because that’s what it’s been showing us so far. Short short-term be very bullish on Priceline (NASDAQ:PCLN ) because it’s looking like it’s bouncing a little bit. In the intermediate term I would say be kind of bearish on Priceline (NASDAQ:PCLN ). There you go, the long, the short, and the in-between of it.
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