Priceline Group Inc. (PCLN) is a provider of online travel and travel related reservation and search services through its online travel agent services, connecting consumers wishing to make travel reservations with providers of travel services across the world. The stock is currently trading around $1,256.04 at the upper end of its 52 week range of $990.69-$1329.90. The stock has been out performing the market this year rallying 10.24% year to date. PCLN is scheduled to report earnings before the opening bell tomorrow, and the stock is up $15.56 or 1.21% on the session ahead of the close.
Over the past 11 quarters PCLN has rallied on earnings day 9 times with an average move of 5.19%. The stock appears bullish on a chart going into the release having ripped through the Ichimoku Cloud and continued trading above the cloud in the past month on the daily bars. Over the past 11 quarters PCLN has rallied on earnings day to the nearest expiration 8 times with an average move of 5.17%. Investors are mainly watching to see how the company performs due to increased travel during Summer. With the stock trading above the cloud, incredible earnings history and increased travel it is hard to justify anything but a long position in PCLN.
The options market is currently implying a move of around $81.8 or 6.5% in PCLN by the end of this week giving us targets of $1,174.24 and $1,337.84.
Trade: Buy this week’s 1,332.5-1,335 Vertical call spread for $0.50
Risk: $50 per lot
Reward: $200 per lot
Break Even: $1,333
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