Today’s focus is on Expedia, which has faced significant challenges in January. The stock experienced a notable decline in the second half of the month, and this drop is technically significant. From November through the first half of January, Expedia was moving sideways in a rectangle pattern, marked with yellow lines on the chart. This consolidation phase reflected indecision in the market, but recent price action has changed the sentiment dramatically.
A few days ago, the price broke out of the rectangle to the downside, signaling increased selling pressure. This move has established a negative sentiment, with further declines likely as long as the price stays outside the rectangle. The blue horizontal support below $156 is now the primary target for this bearish move, and the probability of reaching that level remains high given the current momentum.
However, should the price climb back inside the rectangle, moving above the lower yellow boundary, it would suggest a false breakdown. Such a move would provide a buy signal, indicating that buyers have regained control and that further upside is possible.
For now, traders should remain cautious, as the technical setup favors continued weakness in the stock unless a significant reversal occurs.