Is BKNG Prepared For A Move Higher?

by Darius Anucauskas
12:36, 2020/12/21

Certainly, it will take time, until the travel industry will be able to recover from the effects of the pandemic, which hit the world in 2020. Companies like Booking Holdings Inc (NASDAQ: BKNG), which are mainly dependant on the health of the whole travel industry, took a hit, leading to billions in lost revenue. In November, when the world received the news about the development of the vaccine, the travel industry related companies took a huge liking from investors, which helped boost those travel stocks. However, we can see that the tourism industry is now waiting for further news surrounding the restrictions on free travel. Once that loosens up a bit, we could see travel stocks bouncing back up.

The technical picture of BKNG shows that the price structure is forming a potential descending triangle pattern from around the beginning of November. According to the technical analysis rules, such patterns tend to break to the upside, however, until we see a clear break above the upper side of that pattern, we will remain cautiously bullish.

If, eventually, the upper side of the aforementioned triangle surrenders and the share price rises above the 2140 barrier, marked near the highs of December 4^th, 7^th and 14^th, that might open the door for a further move north, where the next possible target could be at 2228, which is currently the all-time high. If the buying doesn’t stop there, a break of that territory would place the stock into the uncharted territory.

At the moment, the RSI and the MACD are pointing slightly to the downside. However, the RSI is still above 50 and the MACD remains above zero, despite sitting slightly below its trigger line. The fact that the two oscillators remain in positive territories, support the overall bullish case. But the lack of upside price momentum is inline with the idea of waiting for a break above the 2140 barrier first, before aiming higher.

Alternatively, if the lower side of the aforementioned triangle breaks and the price falls below the 2050 hurdle, marked near the low of December 11^th, that may spook new buyers from the field temporarily. BKNG could then drift to the 1953 zone, marked by the low of November 12^th, a break of which might set the stage for a drop to the 1865 level. That level marks the highest point of October.

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