The American online travel shopping company for consumer and small business travel whose websites are primarily travel-fare aggregators and travel metasearch engines, Expedia Group Inc. (NASDAQ: EXPE) seems to be gearing up for a surge as per its latest charts.
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out of a Symmetrical Triangle pattern. This is a continuation pattern and is characterized by two converging trend lines connecting a series of sequential peaks and troughs. This pattern is marked on the daily chart as purple color lines. A breakout from a symmetrical triangle pattern usually signifies the start of a bullish move.
#2 Price above MAs: The price is currently above both the short-term moving average of 50-day SMA and the longer-term moving average of 200-day SMA. This usually implies a possible bullish bias for the stock.
#3 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
#4 Bullish ADX and DI: The ADX indicator shows bullishness in the daily chart because the (+DI) line and the ADX line are greater than the (-DI) line, and the ADX line has started to move up from below (-DI) and (+DI).
#5 Above Support Area: In the weekly chart, we can see that the stock is currently trading above a strong resistance-turned-support area, which is marked as a pink color dotted line. This is a possible bullish indication.
#6 MACD above Signal Line: The MACD line (blue color) is currently above the signal line (orange color) in the weekly chart as well, indicating a bullish bias.
#7 %K above %D: The %K line of the stochastic is currently above the %D line in the weekly chart, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal entry level for EXPE is if it corrects to the price of around $123 to $114. However, those with a higher risk appetite can purchase the shares of EXPE above yesterday’s close at around $130.50.
TP: Our first target price is $140. If the stock crosses above it, the next target price is $150 in the next 3-6 months.
SL: To limit risk, place a stop loss at $124.00 (for entry near $130.50) and $108.00 (for entry near $120). Note that this stop loss is on a closing basis.
Our target potential upside is nearly 7% to 25% in the next 3-6 months.
- Entry near $120: For a risk of $12.0, the target rewards are $20.00 and $30.0. This is a nearly 1:2 and 1:3 risk-reward trade.
- Entry near $130.50: For a risk of $6.50, the target rewards are $9.50 and $19.50. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the symmetrical triangle pattern breakout level. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in its sector.
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