In his first Executive Decision segment of Monday's "Mad Money" program, Jim Cramer welcomed Brian Chesky, chairman and CEO of Airbnb (ABNB) , to the show to discuss the company's most recent results.
Airbnb reported last month that its second-quarter loss narrowed sharply on rebounding revenue, but cautioned that the fast-spreading Delta variant of the COVID-19 virus is beginning to affect its business.
Chesky said Airbnb just marked its one billionth guest arrival this quarter, a fantastic feat for the 14-year-old company. Airbnb has more than six million locations in its network and more than 55% of its hosts are women.
When asked about the market dynamics during COVID, Chesky noted that with people untethered from the office they're trying new locations more often and staying for longer periods. People live in homes for a reason, he said, and that's why people prefer renting a home rather than just a hotel room.
We paid an overnight visit to the charts back on June 22 and wrote, "Traders could go long ABNB at current levels, risking a close below $140. The $178 area is our first price target." Let's check into the charts again.
In this updated daily bar chart of ABNB, below, we can see that prices dipped below $140 in July and that should have stopped our suggested longs. After this unfortunate pullback ABNB rallied to the $170 area, which was $8 short of our original price target. Looking at the chart with fresh eyes today I see that the $170 area is the lower end of the trading in March and April. This area or zone of prices is likely to act as chart resistance as some older longs try to get even.
The slopes of the 20- and 50-day moving averages are positive, but these are relatively short-term indicators of trend. The On-Balance-Volume (OBV) line has improved from the middle of July but recently shows some weakness as traders appear to be turning into more aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator has narrowed significantly but remains above the zero line.
In this weekly Japanese candlestick chart of ABNB, below, we can see two small upper shadows as prices neared the $170 level. This is a subtle suggestion that resistance is overhead. Meanwhile, the OBV line and the MACD oscillator still look positive.
In this daily Point and Figure chart of ABNB, below, we can see the software is projecting the $202 area as a potential price target.
In this weekly Point and Figure chart of ABNB, below, the software comes up with a $202 target again.
Bottom line strategy: The price action or potential chart resistance above $170 bothers me. ABNB could push higher, but in this current weak environment for the broad market I am not inclined to be a buyer of ABNB. Stand aside for now.