I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,725 Blog Posts

Travel Stocks Fitting My Setup

Online travel services empower smart phone wielding travelers to navigate the madness of bookings via their ever impoving mobile apps.  The charts for three big dogs PCLN, TRIP, and EXPE all have my interest.

The EXPE setup differs from the setups in PCLN and TRIP.  I thought this would be a good opportunity to explain my two setups.  First, the charts:

Setup #1:

“Define the direction of the trend, trade the pullback and potential thrust in the direction of the trend.”

Expedia currently has the look.  I see price in a clear uptrend.  Recently we’ve pulled back.  I bought shares at the close.  This is a setup I trade in many markets including index and currency futures.  I will play this position with as large as a 20% position.  Currently I have a 6% position.

Setup #2:

“Fade an overextended directional move using a two tier entry.”

PCLN had the look over the last two trading days.  I was stalking the name, but ended up missing the entry.  TRIP however still is a candidate.  The play here is put a half position on with a plan to double the position should it trade lower.  The key element to taking this type of trade is defining “I’m wrong” price.  The other key element (perhaps the most important) is to scale off the original purchase when price trades higher.  This lowers the risk on the trade and gets your cost average down to the second tier of purchase.  Then, you can reassess the risk and potential.  I have no position in either name, but would be more apt to purchase TRIP at this point.


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