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
