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[1]), 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[2] 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[3], 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[4]. Sign up for his free Weekly Market Outlook Video here[5]. As of this writing, he did not hold a position in any of the aforementioned securities.