Now that I’m addicted to PriceLine the stock (PCLN), I was going through my notes and previous post on trading this stock. Turns out my call on a short-squeeze in May was a great trigger point and learning . This is an old chart I put up, but the formula or principle is still there:
1) notice the sharp 80 point drop in less than one month. Obviously you need a “sharp decline” to start the squeeze.
2) volume check shows there was some panic selling, but since there was only one large red bar I would lean more toward “profit-taking.”
3) Buying check after support- notice the steady buying after PCLN hits support at 180. Good old fashion whole number. Just by eye-balling it, that support looks like a long term trend line, I’m guessing 90-day?
4) Timing- the spark that starts the rally most often occurs during big news events, like earnings. In this case, it was surprise earnings. This would have been a perfect spot for an options strangle play! Anyway, here comes the volume.
End result….
Now go bank some coin.
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