PCLN Update-Reports Tonight

PCLN reports tonight so we want to take a look at it as a possible earnings play. I'll give you what I have so far, although GOOG taught us that the signals that are important can come in the last 15 mins. of trade before they report so we want to keep an eye on it all day.

If you have been around for a bit, then you know PCLN was a core short entered late April/Early May of this year at an average price of $761.79, so we got an awesome entry and the position with no leverage made +26.52% before I closed it on October 19th.

On Oct. 19th, the game plan for PCLN was to wait for a move higher with a strong negative divergence and enter PCLN short again for another move down, we're not there yet.

 A is a bullish price pattern that had a negative 3C divergence, we had a strong feeling the breakout would come, but it would be a head fake move, that is what we shorted, the head fake breakout at "B" giving us great positioning with minimal risk and high probabilities. Point "C" is Oct. 19th where PCLN was covered, this was as close to perfect as you get with entries and exits without being the recipient of just dumb luck.

 This shows the negative divergence on a 60 min chart as the bullish descending price wedge was forming, the red square is the breakout from that wedge where we went short, the white box is where we covered.

 This is why I covered, a 5 min leading positive divergence, the divergence doesn't go past 5 min and thus it seems a lot like the market and is acting like the market. As for earnings, thus far I don't see an edge that is beyond that we are already seeing in the broad market so while I would expect PCLN to give a little more upside based on what we see right now, I don't see it as coming from a strong earnings report that moves the stock, it's more drafting the market in my opinion.

 The 3 min and a similar range like the market with a leading positive divergence, PCLN has started responding to the upside already.

 2 min

This 1 min negative divergence is interesting, if it gets a lot worse today I may even say that PCLN may have a negative reaction to earnings, but we are pretty far from that still.