Airbnb (ABNB) will be heading lower in the weeks ahead as the fundamental backdrop has weakened. On Tuesday Morgan Stanley cut their fundamental rating of the travel company to "sell".
In our November 1st review of ABNB we wrote that "I have no knowledge of what Airbnb might report to shareholders this evening, but the charts above suggest it will be easy to get a reservation. I would not look to be a buyer just yet."
Let's check out the charts and indicators again.
In this daily bar chart of ABNB, below, we can see a number of downtrends. We can see the larger downtrend unfolding over the past year and we can see a shorter downtrend from early September. Prices are testing the lows of early July. Prices did not stay in the early July zone for long so the idea that $86.71 is important support is laughable.
The daily On-Balance-Volume (OBV) line is in a downward pattern and tells us that sellers of ABNB are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of ABNB, below, we see some bearish clues. Prices are in a longer-term downtrend and trade below the negatively sloped 40-week moving average line.
The weekly OBV line has been soft since the middle of October. The candles in November show only small lower shadows which is not a strong sign that traders are rejecting the lows.
The MACD oscillator is bearish and turning lower.
In this daily Point and Figure chart of ABNB, below, we can see the recent decline in price along with a price target in the $71 area.
In this second Point and Figure chart of ABNB, below, we used weekly price data with a five box reversal filter. Here the chart suggests a price target in the $34 area.
Bottom line strategy: Continue to avoid the long side of ABNB. Prices are likely to make lower lows in the weeks ahead.
