Pivots For Longs And Shorts
Priceline.com shares took a drubbing
Thursday after the announcement of a new online competitor in the market for cheap
airline tickets. The stock managed to rally just above its May support level. So
there’s a pivot point for the shorts.
Like Priceline
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PowerRating), Hotwire will allow travelers to bid for unsold airline tickets over the Web if they’re not locked into specific flight times or choice of airline. Hotwire
plans to go live in the fall.
Priceline shares have been in a
downtrend since tagging an intraday high of 104 1/4 on March 14. Since then,
stock’s worst showing has been its May 24 session low of 33 1/16.
Not to kick a company when it’s down,
but from a short-selling viewpoint, I like the fact that Priceline’s shares have
continued to fall throughout the company’s advertising campaign featuring actor
William Shatner. Sometimes, advertising campaigns win buyers of a company’s
stock as well as its products.
Caution, though. The stock did close
above its open and near the top of the day’s trading range amid heavy volume. Is
this institutional bargain-hunting, or short covering? To avoid a bear trap, I’d
set the pivot point to short beneath Thursday’s low of 33 5/16. Let’s wait for Priceline to break 1/8 point below the May 24 low 33 1/16. In other words,
let the stock hit 32 15/16.
Oxford Health Plans
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PowerRating) said it
will drop its Oxford Medicare Advantage plan in eight New Jersey counties
starting next year. The company said Medicare reimbursements that are inadequate
to cover healthcare costs.
The HMO group has led the market of late. And Oxford
shares have been consolidating gains of the past month and forming a tightening
price zone. Declining volume, declining volatility. Those are signs that
shareholders are sitting tight. This could set up the stock for a nice breakout
if demand heats up.
A pivot
point would be the stock’s June 16 high of 24 5/8. (See the black arrow in the
chart.) Insist, though, that any long trade come on strong volume.