Today’s Big Stock: Priceline.com Incorporated (NasdaqGS: PCLN)

Priceline.com Incorporated (PCLN) is set to release its quarterly earnings report on February 27th. Although the price of PCLN is higher than the preferred range of most of our readers, the chart analysis of PCLN can still be very educational for traders.

Priceline.com Incorporated is a global online travel company that offers its customers a range of travel services, including the opportunity to purchase hotel room reservations, car rentals, airline tickets, vacation packages, cruises and destination services in a price-disclosed manner. It also offers its “Name Your Own Price” service that helps its customers to use the Internet to save money by allowing them to make offers for travel services at prices they set, while enabling sellers, which include many of the domestic hotel, airline and rental car companies, to generate revenue. It offers its customers hotel room reservations at over 150,000 hotels worldwide through the Booking.com, Priceline.com and Agoda brands. It offers customers the ability to make hotel reservations on a worldwide basis.

Please take a look at the 1-yr chart of PCLN (Priceline.com Incorporated) below with my added notations:

 

PCLN has been trading in a wide range throughout most of the year. During that time, the stock has been running into a clear resistance area around $550. As can commonly happen with stocks, PCLN has moved towards that important level again as earnings have approached. You can see how just as recently as last week PCLN tested the $550 level again as resistance. Will a strong earnings report give PCLN the lift it needs to break higher?

The Tale of the Tape: PCLN has a clear 52-week resistance level at $550. The company releases it’s earnings report on February 27th. If the stock breaks through the $550 resistance, a long trade would be advisable with a stop placed below $550.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT