Courtesy of the “no taper” decision by the Federal Reserve yesterday, U.S. stocks rallied hard, taking many to fresh all-time highs. One of the high-beta stocks that followed suit was Priceline (PCLN), as it squeezed to a new all-time high and even touched the $1,000 mark intraday after holding its medium-term uptrend in place during the past few weeks.
I last discussed the state of Priceline stock on Aug. 13. In specific, I discussed that after the vertical leap and up-gap from Aug. 9, PCLN was not a stock I would chase at the time. What I foresaw was the stock consolidating back toward its breakout area near $935, which would then allow it a better chance to move to a new all-time high. For the most part, that’s exactly what happened.
Before looking at the close-up chart, though, note that the price of Priceline stock formed its previous all-time high back in April 1999, at the $990 level. You can check out my 13-year chart here, but for now, on to the three-year chart:
Note that while choppy at times, Priceline stock does hold true to its major trendlines, and I would not consider trading PCLN from the short side until its latest and rather steep uptrend line dating back to May 2013 gets snapped. The trend — up, for now — remains our friend as market-chasers, trend-followers and thrill-seekers continue to play this stock as a long.
I would be remiss, however, if I didn’t point out that a high-beta stock such as PCLN has the potential to quickly reverse course. So, please tread carefully.
On the close-up chart of Priceline stock, the only thing I can point to is Wednesday’s break to a fresh all time-high, as PCLN is now in uncharted territory.
As such, I don’t see anything particularly bearish at current juncture. However, I will say that for those riding the wave and playing the long side of Priceline, any one-day bearish reversals should be respected.
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free Weekly Market Outlook Video here. As of this writing, he did not hold a position in any of the aforementioned securities.