Is Priceline.com Oversold?

Published on Thursday, 09 August 2012 08:52 Written by TradersHuddle Wire

New York, August 9th (TradersHuddle.com) - Shares of Priceline.com Incorporated (NASDAQ:PCLN) closed the session at $562.32 well below calculated support at $634.01. Price action placed the stock in oversold territory as investors and money managers moved out of their positions.

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 $634.01 and resistance at $682.97, prior to its decline. When the stock broke calculated support, it sparked the current down draft, which has shown how traders move out their positions in the stock.

From a technical perspective, the Priceline.com stock is in severe pain, as the harsh sell-off could place a heavy burden on buyers, who as they look to get their money back, might generate a price dynamic where buyers will become sellers as the bounce materializes. It can be expected that previous support will become resistance, as a new range gets defined. The maximum move for the stock should be calculated to return to previous support at $634.01. Traders wanting to play an oversold bounce in Priceline.com , by establishing a long position, would need to wait for evidence of buying at a specified area.