Travel Advisory! Maybe Priceline (PCLN) is at the right price! (November 24, 2015)
PCLN
I’m looking at Priceline ( NASDAQ:PCLN ) and I think that this stock is setting up for a nice bounce tomorrow. It’s expensive, so unless you’ve got a LOT of money it’s not like you’re going to buy THAT many shares, but you can trade options on it as well. Here’s what we’ve got, we’ve got a stock that had been well extended above the 200-day moving average. It just doesn’t get more extended than that. It’s really hard, if you bought it up here, or if this is your tendency, to do stuff like this. Try to use this type of feature (most trading software has it) where you can kind of scroll back and forth and find the spots where it turned out to be really a bad place to buy, and a really good place to buy.
What you’ll see, and just watch this in relation to the 200-day moving average, that was not a good time to buy. That was almost 200 points, actually well over 200 points from the very top to the very bottom. The thing is, people get these “enthusiasms” where they just can’t help it, you’ve just got to buy at 1460.00 because it’s going to 2000.00. And maybe so, but just not right away. So now we’re looking at this; to me you don’t want to be selling this because, “Oh, it broke below the 200-day moving average.” No. You want to be looking here and saying, “Well it was good to buy it here, we didn’t get that much of a move but it did move up. It was good to buy it here because we got a HECK of a move. And it was good to buy it here because, again, if you’re trading options, 145 points, not too shabby.”
By the way from here, 200 points down. Same thing here, over 200, almost 250 points down. This is a time to be buying not selling. And so you’re buying this stock right now but you’re having some discipline in there. Put your stop just a little bit before today’s low of 1212.00 and then you know exactly how much you are risking. You are risking 28 points or so, maybe a little more than that. and The only reason you’re going to be out of this stock is if this actually was not the low. We want to see it be kind of a “climax” low. You see the heavy volume here. Big turnaround intraday, which is why the stock traded way down and then closed near the top of the range. So what you’re looking for tomorrow is some follow-through.
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