I don't like to place bets into earnings reports, but priceline.com (PCLN) sure does look to be a replica of Amazon (AMZN) and Google (GOOGL). AMZN and GOOGL both reported strong results in July and gapped significantly higher. After pulling back for several weeks to fill their gaps, both stocks rallied just before their next earnings releases to challenge the July highs. Then just before earnings, we saw minor selling episodes with both exploding higher as they easily surpassed Wall Street consensus estimates. The same pattern has developed for PCLN. Blowout earnings a quarter ago prompted a huge gap up. Then PCLN saw short-term selling to fill its gap and now the subsequent rally is complete as the early August highs have been retested. While a gap higher with upcoming earnings isn't a slam dunk, even a pullback after earnings would be bullish as the long-term weekly chart (not pictured below) shows a cup or inverse head & shoulders pattern - both are bullish continuation patterns. Here's the daily chart, reflecting the recent test of resistance:
PCLN is part of the travel & tourism industry ($DJUSTT), which has been a stellar relative performer the past three months. In addition, PCLN looks very strong relative to its peers as it currently resides in a relative bull flag. A breakout above the price resistance shown on increasing volume would be quite bullish.
Happy trading!
Tom
