Priceline Will Not Stop This Time

• Posted by Greg Harmon
• on June 7th, 2016

There has been a magical force field in place. It is as if the stock is trying to attack the USS Enterprise but Captain James T. Kirk has plenty of dilithium crystals and has raised the shields in time. But I’m sorry Captain, the 1365 price area in Priceline stock ($PCLN) will not stop it this time. It is time to bust a move to the upside.

The chart below gives several reasons why. After completing a bearish Butterfly harmonic in early November, the stock did reverse. A lot. It retraced over 150% of the Butterfly. But what is interesting in that downward move is where it started. The gap down day opened at 1362.60. And that price area has been a brick wall ever since.

It took until the market bottom in February for the destruction to end. Then with a gap up over the 200 day SMA it cruised higher, to 1361. Another pullback, to the 200 day SMA, and it ran back up, to 1369. A second pullback broke through the 200 day SMA and oscillated around it for a month. As it did so the Bollinger Bands® squeezed in and the momentum indicators found their bottom. As the RSI and MACD started higher, the Bollinger Bands opened to the upside and it has been a quick move back to 1373.

Slightly higher highs. Will the third time be the charm? Momentum supports continuation as does the opening Bollinger Bands. A break into the gap has until 1430 to fill it. And a Measured Move from the February lows supports a lot more, up to 1650. A close over 1380 could be considered a buy trigger against a stop at that 1360 area or slightly below.

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