Expedia Group Inc. (NASDAQ: EXPE) seems to be gearing up for a surge as per its latest charts. The company’s websites include primarily travel fare aggregators and travel metasearch engines, like Expedia.com, Vrbo, Hotels.com, Hotwire.com, Orbitz, Travelocity, trivago, and CarRentals.com.
Bullish Indications
#1 Ascending Triangle Pattern Breakout: The daily chart shows that the stock has broken out of an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in pink color. The breakout level of the ascending triangle pattern generally acts as a good support level.
EXPE – Daily Chart
#2 Trading Above MAs: The stock is currently trading above both its 50-day and 200-day SMA, which implies that the bulls are currently in control.
#3 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#4 Bullish ADX and DI: The ADX line has started to move up from below –DI and +DI lines. The +DI line is also currently above the –DI line. This indicates possible bullishness.
#5 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates possible bullishness.
#6 Consolidation Area Breakout: The weekly chart shows that the stock was trading within a range for the past several months. This indicates consolidation. The consolidation area is marked as an orange color rectangle in the chart. Currently, the stock has broken out of this consolidation area. A breakout from a consolidation area generally indicates bullishness.
EXPE – Weekly Chart
#7 MACD Above Signal Line: In the weekly chart as well, the MACD line (light blue color) is currently above the MACD signal line (orange color). This is also a possible bullish sign.
#8 Price Above MAs: In the weekly chart as well, the stock is currently trading above both its 50-week and 200-week SMA, which implies that the bulls are currently in control.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level of EXPE is in two scenarios – if it closes above the price of around $199.00, or corrects to the price of around $189.00.
TP: Our target prices are $200 and $210 (for entry near $189) and $210 and $225 (for entry near $199) the next 4 to 6 months.
SL: To limit risk, place a stop loss below $182.00(for entry near $189) and $192.40 (for entry near $199). Note that this stop loss is on a closing basis.
Our target potential upside is 6% to 13% in the next 4-6 months.
- Entry near $199: For a risk of $6.60, the target rewards are $11.00 and $26.00. This is a nearly 1:2 and 1:4 risk-reward trade.
- Entry near $189: For a risk of $7.00, the target rewards are $11.00 and $21.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the ascending triangle 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.
Happy Trading!
— Tara
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