Expedia (EXPE) peaked in November and had sharp losses to an early February low. Where could it be headed to next?
Rounding off the numbers, it looks like EXPE has made roughly a 50% correction of its $50 decline from November to February. Prices retested and failed at the underside of the 50-day moving average line in February -- and finally rallied over that line in March. EXPE rallied to the underside of the longer, 200-day average line and has so far failed to cross over it.
Read Bruce Kamich's analysis of Trip Advisor here.
Notice the moves in the On-Balance-Volume (OBV) line, which first moved up with prices and has since dipped. This up-and-down movement of the OBV line tells us that aggressive buying of EXPE can be short-lived. The most bearish forward-looking technical clue is the momentum study, which shows a bearish divergence between the higher highs in price in February and March and the lower highs on the momentum indicator in the lower panel.
This longer-term chart of EXPE, above, shows how well the 40-week moving average line has worked. The rising 40-week line would have been successful on the way up as well as on the way down. EXPE broke the 40-week moving average line, and the line has turned flat. Prices have rallied back to the underside of this average and have failed.
The OBV line is neutral, but the Moving Average Convergence Divergence (MACD) oscillator is well below the zero line and has narrowed toward a cover-shorts signal. Reviewing the short-term and the long-term indicators on EXPE, it would not surprise me if EXPE returned for a retest of the $90 level in the weeks ahead.
