EXPE caught my attention this morning as its option volatility spiked almost 20%. The stock itself so far today is down 2.40%, which comes after a 13% gain last Friday on news that the company will split its TripAdvisor company into a different publicly traded firm. Because there is corporate finance involved here on the newsfront it makes trading on technichals more difficult. Nonetheless, let me point out a few things on the charts.
On the weekly chart below this all doesn't look so juicy. Let's focus on the daily chart where we see the following:
The stock powered up and through the 200 day moving average (red line) as well as an important previous support zone (horizontal blue dotted line) on Friday, where it currently seems to find support. Friday's high also exactly came into a downtrending resistance line (downward sloping blue dotted line). Below the 200 dma is an unfilled gap that works to say $22.50.
What I see here is a trade setup with defined risk, which is what we're all about. A close abovelast Friday's high could be bought whereas a close below Friday's low could be tried as a short. Either was, stops have to be clearly defined and event risk in terms of news as it relates to this company-split is certainly there.