If It’s Not Working, Look Elsewhere
Everyone was talking
about Priceline.com (PCLN) this morning. Yesterday (7/31/01) after
the close, the company reported its second-quarter earnings of 5 cents a share,
4 cents better than consensus. After the report, Anthony Noto from Goldman Sachs
stated, “We think the company is positioned to continue to deliver
consistent results” and repeated a market outperform rating on Priceline.
The chart below is a daily chart of PCLN as of the close of 7/31/01.
The issue broke above its 20-day
moving average, and volume was more than twice its daily average. Probably,
traders were betting for better-than-expected results and hoping for quick
profits in the following trading session, preferably at the open. The chart
below is a five-minute chart of PCLN from today’s session.
The stock gapped nearly 13% and
immediately challenged the high set on July 2. This was the dream for those
traders who bought the stock yesterday. They, without hesitation, began to sell
the stock hard. Needless to say, PCLN quickly lost the upward momentum and began
to trade sideways. Subsequently, shortly after 12:00 p.m., PCLN broke down below
its intraday support level. (The upper line is the level of the July 2 high. The
lower line is today’s intraday support level.)
If it’s not working out for you, someone else is probably eating your lunch.
Don’t stick around too long! There are so many other opportunities in the
market.