Patterns in Priceline PCLN Range and Breakout Levels
Priceline (PCLN) gapped down from a lengthy trading range yesterday but may be trying to re-enter it.
Let’s search for “Patterns in Priceline” and plan any trading opportunity from there:
First, let’s focus on the Rising Range Price Pattern as highlighted above.
PCLN is a high-priced stock that traders can approach with option strategies, even simple put or call buys.
Yesterday gave us a big breakdown under the $1,260 level which was a key rising trendline.
The upper rising resistance trendline intersects a price level just under $1,400 per share.
The Midpoint Magnet Price is near $1,330.
With those levels in mind, let’s continue to focus on the current breakdown and two price pathways:
The first pathway – a BULLISH PATH – suggests that price re-enters the trendline range, triggering a BEAR TRAP outcome.
If so, we would look to play bullishly within the pattern back to the Midpoint (at least) near $1,330.
Otherwise, the breakdown or BEARISH PATH opens similarly to that of January 2016 with a sustained breakdown and breakout of the pattern.
Price gave us two such breakouts and returns back inside the pattern.
Here’s an indicator-based chart for more clarity:
Not only did price break down out of a Rising Range Pattern, but it also broke under the 200 day SMA.
I highlighted (green) each time price retraced toward – then bounced up away from – the 200 day SMA.
Again, we see the January event where price broke and collapsed lower (beneath $1,200).
In simple terms, focus on the $1,250 level as your Bull/Bear Pattern Pivot and trade the departure away from here.
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Corey Rosenbloom, CMT
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