Here is your trading advice on TripAdvisor (TRIP) (January 15, 2015)
I want to look at TripAdvisor ( NASDAQ:TRIP ) and this is why: we’re looking at the daily chart, it had been trending sideways for a while here, it just broke down today. I typically like to short stocks where instead of a sideways channel it’s really kind of a channel down like this, and then the stock will be doing it’s thing, up and down, up and down. I like to short here as opposed to down here like we see here with TripAdvisor ( NASDAQ:TRIP ).
You get more confident in shorting a stock like this. I think this is one of the last things you want to buy right now, but you get more confident shorting a stock when you go out to the weekly chart and you see this; this is a textbook top, nice rally for a year and a half, whatever it was, really, really nice rally and then a sideways consolidation for how long?
If we use this as the start of the sideways consolidation, let’s even use this; you’ve got consolidation for half a year anyway. However, you want to draw your chart, in fact let me do it for you. This is how I’m looking at consolidation, that’s really where this has been hit so many times, down here, and bounced. You see a high, we’ll call this a double top, could be a higher high, it’s not a lower high; and then finally a lower high here and a lower high still. So we’ve got a stock that’s a textbook top.
The way this stock is looking right now on the weekly chart this could go a lot lower. The euro, let’s just say it imploded today; these guys do a fair amount of business over seas, so this is a stock I think you can short right now. If you don’t want to short the stock itself buy some puts, that way you absolutely limit your loss, you know exactly how much you could lose.
This is a stock you don’t want to be buying on weakness; I’d say you could short it on weakness. I typically like to short weak stocks on strength, here I would just short weak stocks on weakness, but give the stock a little bit of room to oscillate, because it isn’t going down in a straight line, it will move up against you some. By the way, if it happens to move up to 70.00, 72.00, 73.00, that’s definitely a great time to be shorting this stock.
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