Re-visiting Priceline (PCLN)

Time to check back in on Priceline - to recap last week, I liked it and was ready to buy (Priceline (PCLN)), but held off because of the chart (PCLN Again).  I wanted to wait and see where it went short term within its 2+ month trading range (hoping it would drop to the bottom of the range for a better entry point).  Here is today's chart:

You will notice that it did finally break out of the range the very day I decided not to go long (and has stayed above since), but the volume (see yellow above) has been lackluster.  To me that's not a solid breakout and should be eyed with caution.  While I still like the stock, I think it's just as likely to drop back below what I view as weak support around $426 in the short term.  Holding off again for now.

DISCA Again

DISCA has continued to drop since my last post and is now down over 5% since last Monday and more than 1.5% below from where I bought more on Thursday morning.  Since this is currently my largest position I decided more research was in order (and some of this I should have done already).

To recap, DISCA is trading at a multiple more or less equal to the growth rate, very cheap.  I listened to the 3rd quarter conference call today (from Nov 2nd) and heard didn't hear anything to change my bullish view on the company.  Also took a closer look at the 3rd quarter financials:

• Current ratio is 2.7 vs. a 2.1 ratio at 3rd quarter 2009
• Long tern debt is up only slightly (4% from 3rd quarter 2009)
• 3Q net income was $186 million with only $49 million in interest expense for the quarter - And interest expense was actually down over 24% from 3Q 2009
• Margins were up over 3Q 2009 - 45% vs 43% last year

The decline seems to coincide with a Citigroup conference they participated at last Tuesday, 1/4.  So thinking there must have been bad news I listened to the presentation today, which was a 30+ minute Q&A session.  It was sort of bland, but I didn't hear anything to drive the stock down - on the other hand nothing was said you'd consider "exciting" for the company, and maybe that's what the street was looking for.

We should also look at the chart since I did note last week that it was approaching support at $40, which it has broken through - that $40 is now resistance.  However, I see the next level of support relatively close, around $39, which is also just slightly above the 200 day ema.

My bottom line opinion - I see nothing to change my positive view on the company.  This is yet another buying opportunity, but I do recognize that the stock could have some difficulty trading above the $40 resistance in the short-term.  Also, if you look at the chart above, we're not that far from my stop which I placed a little below the 200 day ema.  Maybe I'll leave my common position alone and go with a call for my next by...?

Discovery Communications (DISCA)

Discovery Communications is a current position that I made 2 buys back in November at $40.28 and $41.59.  It was profitable for awhile but has taken a 3% dip this week on higher volume.  It's also starting to approach support at $40 (see chart below) so I thought I should take a second look.

• DISCA is currently trading ($40.55 close) at 19.1 times 2011 earnings which is more or less even with its 2011 estimated earnings growth of 19.8%.  (Estimated 2011 EPS has actually been revised $0.02 higher than when I first looked at it back In November)  One times earnings growth is cheap.
• Median analyst price target is $45 - 11.1% from today's close.
• To get only a 10% upside, DISCA only needs to trade at 1.06 times the 2011 growth rate.

Bottom line - I still like it and will take this as another buying opportunity at tomorrow's open.  Look for tomorrow's How I'm Doing to show another purchase or I'll post an explanation if something changes.

PCLN Again

Priceline 1/4/11

I was ready to go long on Priceline at the open this morning but have decided to hold off based on this chart.  PCLN has been in the range shown above since it gapped up in early November.  Currently it's in the middle of the range, which is not a terrible entry point, but I'd like to wait and see if it goes closer to the range bottom.  Of course a few things could happen:

• It could trade up to the top of the range, at which point I will likely wait and see if it breaks out on strong volume, which would be a good entry point
• It could just mark time where it is, and then I'll likely just go long around this level
• It could drop to the bottom of the range, which is my ideal entry point - yes, I know it could then break below, but I'll have a tight stop so if I'm wrong I can cut my loss quickly

CBEY

Broke through resistance (about 16.53) yesterday on strong volume. Going long at the open today.

Sometimes They Go This Fast

Already closed out my ECPG position yesterday for quick gain. Same day in-and-outs are nice, but I don't expect or count on them. Someone suggested I set a trailing stop and let this run in case it takes off from here, but then I run the risk of losing out on this gain if it reverses the next day. I'll pocket this and move on to the next opportunity.

ECPG

Broke 2-month long downtrend yesterday on heavy volume. Going long at market open today. However, it reports earnings next week after the close on 4/27, so I'll close this trade regardless of the outcome prior to the report.

RCRC - Like the chart, not the timing

Broke through resistance (about 16.75) yesterday on strong volume. but I'm not going to trade it. RC2 reports earnings tomorrow, 4/21. Have no guesses what that will look like, but don't care. This is about the chart, not the fundamentals. I'd rather miss any potential earnings bounce than risk getting hit by a bad report. Not a good risk when I have no insight on the quarter.

BOH

Broke through resistance (about 49.20) yesterday on strong volume. Going long at market open today.

IPGP

Broke through resistance (about 11.41) on Fri, 6/12, on strong volume. Going long at market open on Mon, 6/15.

YHOO

Been flirting with resistance (about 14.84) for a few days. Broke through and held above on 5/8 but on weak volume. Finally held with strong move up and high volume on 5/11. Going long at market open.

GOOG

Probably a "trendy" pick right now, but I just like the chart. Broke through resistance (about 379) yesterday on heavy volume. Going long at the market open today.

PALM

This stock has been trying to break through resistance (about 9.25) for several days, and finally did on 4/16 on heavy volume.  Going long at the market open on 4/17.

EMC

Strong close above resistance (about 12.50.). Heavy volume for 2nd straight day above resistance. Going long at market on Monday.

Trade Analysis

More chart analysis below on some current positions.

MNRO

LUX

Adding Another Position

RHT closed strong above resistance (about 16.20) on 3/26 on very strong volume.  Close 3/26 17.60.  Going long at the market open on 3/27.

RHT

One Loser

Was stopped out on one of my positions yesterday - ($1.61) loss.  The chart tells the story.

ACOR

Trade Analysis

A couple charts below to show how my current positions are doing. These are short-term trades.

MNRO

ACOR

ACOR

Strong close above resistance (about 26). Very strong volume. Low of 24.35 bounced off 20 day EMA resistance at 24.33. 3/20 close 26.82.
Going long at the market on Monday.

MNRO

Made new intra-day high at 27.25.  Closed well above resistance (about 25.84) on very strong volume.  3/20 close 26.43.

Going long at the market on Monday.