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!


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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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