TripAdvisor Hit New Highs on Earnings Beat

Published on Wednesday, 02 May 2012 16:39 Written by David Becker

New York, May 2^nd (TradersHuddle.com) – TripAdvisor Inc. (NASDAQ: TRIP) reported first quarter earnings that created a surge in the stock price.  The company reported profits of 35 cents a share, unchanged from 35 cents in the year-earlier period but 6 cents higher than the average analyst estimate. Revenue rose 33% to a record $183.7 million vs. views of $174.40 million.  The company expects 2012 revenue growth to trend above the midpoint of its earlier issued prediction of 2012 revenue growth.

The stock price gaped nearly 5 dollars a share on the open and continued to grind higher throughout the trading session.  At its peak, the stock was up more than 20%.  The surge has created a new high on the stock price, which is poised to continue as momentum is strong.  Support for the stock is seen near $38 dollar a share which was former resistance.  Below $38, the stock should see support near the 20-day moving average near $35.50 and then 50-day moving average near $34. Resistance is seen near the top end of a channel near $45, created by the high in December and the highs in February.

Momentum on price action continues to be very strong with the MACD creating a buy signal in late April, where the spread (the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread.   The index on the MACD, which is in positive territory, is equal to the highs seen historically on the stock.

The RSI (relative strength index) moved from the high end of the neutral range into overbought territory.  The print, which is above 70, has been reached twice in the past 4 months.  In each circumstance, the stock price has declined approximately 13 and 20 percent respectively.