Last week we took a look at some hotel stocks that have been performing quite well over the past year. After digging deeper into the travel and leisure sectors, we also uncovered a niche group that has been performing even better: online travel website companies. These stocks have been on a tear over the past few months and could be a group to watch moving forward. While they are already extended, they look to be primed for buying on a pullback.


One of the best performers in this group is (Nasdaq:
PCLN). PCLN has almost doubled in price after trading just under $180 per shares only a few months ago. PCLN had originally backed off of the $280 level in May. Interestingly, when it gapped up in August, it opened right back at this level. It showed great strength after the gap and never pulled back, providing proof that buyers were willing to pay higher prices. It has followed through and continues to be one of the best performers in the current markets. While PCLN is extended, it could be one to watch on a pullback. The $305-$310 level may be on area to watch for support if it shows some weakness. (For more, see Online Travel Companies Soaring.)


Expedia (Nasdaq:EXPE) is another online travel booking site that has also had a fantastic run over the past few months. EXPE pulled back from the $26 area in July as the markets began a correction and ended up consolidating in a cup-and-handle pattern over the next few months. EXPE cleared the handle portion of this base in early September and easily followed through to much higher prices. Much like PCLN, EXPE is extended from its base. However, this stock is in a clear uptrend and could provide a great opportunity on a pullback.


Travelzoo (Nasdaq:TZOO) is another online travel site, although it focuses on vacation deals rather than bookings. In either case, TZOO has also performed quite well recently. TZOO recently cleared a few resistance levels and volume has really picked up. The $20-$22 level would be one area to watch if TZOO pulls back in the near future. This was the prior peak in May, and TZOO consolidated in this area again in September.


It's interesting that the recent strength in this group is also showing up in foreign travel sites. International (Nasdaq:CTRP), which focuses on China-related travel, has also experienced a strong rally over the past few months. Until this recent breakout, CTRP had been trading sideways between $36 and $42 for several months, with only a few spikes above and below this range. The past few sessions have seen CTRP clear its June peak, and the stock has now rallied from $38 to over $48 in about a month. While the levels are not as clear on this stock, the recent area of resistance near $44-$46 should act as support moving forward and traders should monitor this area on any weakness. (For more, see Gauging Support And Resistance With Price By Volume.)


MakeMyTrip Limited (Nasdaq:MMYT) is a recent IPO that focuses on India-related travel. While this stock is very volatile, it has had an impressive debut. After opening in the low $20s, MMYT has since doubled to trade in the $40 range. The $35 level will be an important area to watch moving forward as this area has been a battleground over the past few weeks.


Bottom Line
While there could be a variety of reasons as to why these stocks should or shouldn't be rallying, the bottom line is that they have all rallied above prior resistance levels. They have also been among the strongest performers over the past several weeks. These are the type of stocks that traders should monitor for orderly pullbacks as possible buying opportunities. While they are certainly extended at current levels, these stocks could continue to lead the markets higher over the next few months.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Joey Fundora did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Chart Advisor

    4 European Stocks to Consider Buying

    European companies, listed on US exchanges, that are providing buying opportunities right now.
  2. Chart Advisor

    ChartAdvisor for October 2 2015

    Weekly technical summary of the major U.S. indexes.
  3. Investing

    How Diversifying Can Help You Manage Market Mayhem

    The recent market volatility, while not unexpected, has certainly been hard for any investor to digest.
  4. Technical Indicators

    Why MACD Divergence Is an Unreliable Signal

    MACD divergence is a popular method for predicting reversals, but unfortunately it isn't very accurate. Learn the weaknesses of indicator divergence.
  5. Chart Advisor

    Expecting a Big Breakout In These 4 Stocks

    These stocks are tightly wound following big moves, and upon breakout more big moves could ensue.
  6. Chart Advisor

    Trade Base Metals With These 3 ETFs

    News out of Alcoa is causing active traders to turn toward base metals for opportunities. Before diving into the market, check out the charts of these three ETFs.
  7. Charts & Patterns

    The Importance Of Tracking The Whisper Number

    Don't let the name fool you: Whisper numbers are making themselves heard. Here's why you should be paying attention.
  8. Chart Advisor

    Stocks With Buy Signals in a Bear Market

    The short-term trend may be down, but these stocks are showing strength to the upside.
  9. Chart Advisor

    ChartAdvisor for September 25 2015

    Weekly technical summary of the major U.S. indexes.
  10. Chart Advisor

    Downtrending Stocks to Short or Sell

    These stocks are trending lower and currently near a short sale areas, based on breaks lower and falling stock indexes.
  1. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
  2. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
  3. Point and Figure Charting Using Count Analysis

    Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >>
  4. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  5. How are double exponential moving averages applied in technical analysis?

    Double exponential moving averages (DEMAS) are commonly used in technical analysis like any other moving average indicator ... Read Full Answer >>
  6. How do you know where on the oscillator you should make a purchase or sale?

    Common oscillator readings to consider making a buy or sale are below 20 or above 80, respectively. More aggressive investors ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!