Don't Ignore This Chart!

Priceline - Will It Be A Repeat Of Google And Amazon?

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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

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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