Don't Ignore This Chart!

Priceline's (PCLN) Continuation Pattern Is Bullish

 | 

Priceline (PCLN) has seen lots of volatility over the past several months including sizable gaps higher and lower, but the technical picture remains bright.  The near-term has turned dicey as a negative divergence has emerged, but that slowing momentum could be exactly what this bullish inverse head & shoulders pattern requires.  At its most recent high, PCLN barely cleared the mid-December high, providing a bit of an upsloping neckline.  Also, bullish momentum appeared to be slowing as the MACD printed lower highs while price set higher highs.  It's not unusual to see a 50 day SMA test after a negative divergence prints.  Such weakness could print the final low (inverse right shoulder) before PCLN breaks out to confirm the resumption of its prior trend (the weekly chart is not shown here, but there was a long-term uptrend in place on PCLN prior to this potential pattern forming).  Here's the chart:

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
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus