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. Trading Strategies

    Who Actually Trades or Invests In Penny Stocks?

    Although penny stocks are highly speculative, millions of people trade them daily. Here are 10 different types who do.
  2. Chart Advisor

    4 Stocks Still Flashing Buy Signals

    In the midst of volatility and a big market sell-off last week, these stocks are flashing buy signals.
  3. Technical Indicators

    Understanding Trend Analysis

    Trend analysis is the use of past performance to predict future price movement of a security.
  4. Trading Strategies

    How To Buy Penny Stocks (While Avoiding Scammers)

    Penny stocks are risky business. If want to trade in them, here's how to preserve your trading capital and even score the occasional winner.
  5. Chart Advisor

    Stocks to Short...When the Dust Settles

    Four short trades to consider, but not quite yet. Let the dust settle and wait for a pullback to resistance for a higher probability trade.
  6. Technical Indicators

    Using Moving Averages To Trade The Volatility Index (VIX)

    VIX moving averages smooth out the natural choppiness of the indicator, letting traders and market timers access reliable sentiment and volatility data.
  7. Chart Advisor

    Strategizing for a Market Fall...or Rally

    The downtrend isn't confirmed yet, so be prepared with trades for whether the stock market rallies or continues to fall. Here's how to do it.
  8. Trading Strategies

    Are You a Trend Trader or a Swing Trader?

    Swing traders and trend traders execute market timing strategies that require different skill sets.
  9. Technical Indicators

    Detrended Price Oscillator Trading Strategies

    The detrended price oscillator (DPO) offers a simple approach to cycle analysis, removing momentum and long-term trends from the equation.
  10. Investing

    Using Fibonacci to Analyze Gold

    Use Fibonacci studies to analyze gold by picking out hidden harmonic levels that can provide major support or resistance.
  1. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  2. Indicator

    Indicators are statistics used to measure current conditions ...
  3. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  4. Mass Index

    A form of technical analysis that looks at the range between ...
  5. Money Flow Index - MFI

    A momentum indicator that uses a stock’s price and volume to ...
  6. On-Balance Volume (OBV)

    A momentum indicator that uses volume flow to predict changes ...
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. What are the alert zones in a Fibonacci retracement?

    The most commonly used Fibonacci retracement alert levels are at 38.2% and 61.8%. A 50% retracement level is also commonly ... Read Full Answer >>
  5. How was the Fibonacci retracement developed for use in finance?

    The use of Fibonacci retracements in stock trading was popularized by noted technical analysts W.D. Gann and R.N. Elliott. ... Read Full Answer >>
  6. How was the stochastic oscillator developed?

    The history of the stochastic oscillator is filled with its own controversies and inconsistencies. Most financial resources ... 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!