Don't Ignore This Chart!

Priceline's (PCLN) Continuation Pattern Is Bullish

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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 of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More
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