Trading Idea: Is Priceline.com Breaking Down?
Published on Friday, 29 June 2012 07:48 Written by TradersHuddle Wire
New York, June 29th (TradersHuddle.com) - Shares of Priceline.com Incorporated (NASDAQ:PCLN) closed the trading session at $643.48 below calculated support at $647.14. The stock broke down technically, raising concerns as the move might trigger additional selling.
Priceline.com Incorporated (NASDAQ:PCLN) operates as an online travel company that enables consumers to save money on a variety of products and services. The Company allows customers to name their own price on products or services and communicates that demand directly to participating sellers or to their private databases. Participants include domestic and international airlines, and hotel chains.
Priceline's stock was trading in a well defined range with support at $647.14 and resistance at $683.37; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.
From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $647.14 will remain in focus as Priceline's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.
Traders wanting to establish a short position in Priceline.com can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $647.14. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.
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