Online Travel Is Taking Off

All of a sudden, the nascent market uptrend is starting to show some vulnerability. It didn't take long. On Monday, the S&P 500 fell modestly, but volume on the NYSE rose from Friday's level. A higher-volume decline three days after the S&P 500 confirmed a new uptrend on Apr. 25 wasn't good to see. It calls into question the viability of the uptrend. On Tuesday, the DJIA and S&P 500 finished with decent gains, but sellers came into the Nasdaq Composite late in the day. The session had the feel of distribution (professional selling) on the Nasdaq as volume rose from Monday's level. It's still too early to give up on the nascent uptrend because the positives still outweigh the negatives in my view. The Dow and S&P 500 finished in the top half of their intraday trading ranges Tuesday, and Dow components such as IBM (IBM), Intel (INTC) and American Express (AXP) continue to attract buyers. The charts of each look just fine. In fact, I'm seeing very little in the way of weak charts when it comes to most stocks in my screens. This is another major positive. Of course, Friday's employment report will have a big say in where the market goes from here. The worrywarts are out there in droves, especially after three straight weeks of disappointing weekly jobless claims data. Non-farm payrolls are forecast to rise 162,000, with the unemployment rate holding steady at 8.2%. Meanwhile, first-quarter earnings reports continue to look solid. Late Tuesday, short sellers scrambled to cover their positions when Expedia (EXPE) spin-off TripAdvisor (TRIP) reported strong earnings after the close. As of Apr. 13, 12.3 million shares were held short, up from 6.7 million in mid-February. First-quarter profit came in at $0.38 a share, flat from a year ago, while sales grew 23%, to $183.7 million. The Thomson Reuters consensus estimate called for profit of $0.33 a share and sales of $174.4 million. Revenue from click-based advertising totaled $144.9 million for the first quarter, up 20% from a year ago, and revenue from display-based advertising increased 17%, to $21.6 million. Subscription and other revenue was $17.2 million, up 67%. I like TripAdvisor's technical setup. A breakout over $37.78 looks like it's in the cards. Heavy-volume breakouts in the early stages of a market uptrend can deliver big gains over time. Shares closed Tuesday at $36.53, down 2.6%, but were trading around $42.02 in after-hours trading on heavy volume. TripAdvisor (TRIP) Source: StockCharts.com View Chart » View in New Window » TripAdvisor isn't the online travel firm doing well. Leadership in the group is broad, as fundamentals in the online travel space remain compelling. On Friday, Expedia reported blowout earnings, and the stock responded, soaring 24%, to $40.31, on huge volume. It followed through Monday, rising another 5.8%. Its chart remains bullish, and two scenarios could play out from here: Expedia could start to move sideways and hold on to the majority of its recent gains; or if conditions in the broad market start to weaken, it could ultimate pay a visit back to its last swing point of $35.57. Expedia (EXPE) Source: StockCharts.com View Chart » View in New Window » Finally, after a technical breakout in mid-February, Priceline (PCLN) has firmed up nicely at its 10-week moving average. I think the stock is buyable right here, with a stop of 5% below the purchase price. Priceline reports earnings on May 9 after the close, and investors will no doubt be treated to another quarter of solid bottom-line and top-line growth. The Thomson Reuters consensus estimate is for first-quarter profit of $3.94 a share, up 48% from a year ago, with sales up 29%, to $10.4 billion -- incredible growth, really, for a company with a market capitalization of $37.6 billion. Priceline (PCLN) Source: StockCharts.com View Chart » View in New Window » _______ Editor's Links More Technical Analysis: Fitz Bits: Put on Some Abercrombie REITs Are Back on the Offensive Three Earnings Plays for Your Watch List

Online Travel Is Taking Off

TripAdvisor, Expedia and Priceline display compelling fundamentals and bullish technical patterns.

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