Since the $3.9 billion acquisition of HomeAway Inc, Expedia shares have been in temporary comma. This acquisition early November 2015 brought about the top-tick around $140. The stock has made several attempts to shake out weak longs but has managed to stay above $100. Recently, price action has been bullish alongside the push to all time highs in the S&P.
Inside the Steamroom we’ve flagged some recent action that is indicating a break from the current consolidation pattern.
The call spread for 1250 contracts purchased today for an August expiration is looking for significant upside. At $3.10 per spread, this trader could see well over a million dollars if the stock rallies to $135.
We also have an October call buyer going for that same $120 strike but he got in much earlier and is playing safer by buying more time.
Earnings are scheduled for July 28th
Usually when we see terrorist attacks in the headlines the first things that gap down and get hit are the travel names like Expedia, TripAdvisor and Priceline. Today’s price action showed buyers continuing to dip buy. Looking at the chart above, $120 is clearly the area of interest for anyone looking at trading this name.
I’d look to buy that August $120 call on a pullback under $3. To cut down risk further, buy more time or use a spread to reduce your cost.
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