A lot of internet stocks went up yesterday and Priceline Group Inc (NASDAQ:PCLN) was one among them. The stock was up 3.5% for most of the day after Oppenheimer upgraded the stock with a revised price target of $1,450 and a ‘buy’ rating.
CNBC’s “Fast Money” trader Dan Nathan, was reporting on the movement of Priceline Group Inc (NASDAQ:PCLN) and how it can trend in the rest of the year. The stock has been consolidating over the last couple of weeks after the acquisition of OpenTable Inc (NASDAQ:OPEN) and this is worth $2.6 billion roughly.
Nathan thinks that the Q2 earnings will be the catalyst for further growth of the stock and that is going to come in the first week of August. He thinks if the stock can continue to rally it might maintain the uptrend it maintained over the last year. If it does manage to maintain the uptrend, that would be about $1300 or $1320 by the end of the year.
“If I think there is good news and if I think the stock can continue to rally, I am thinking that it probably has the potential to recapture that uptrend that’s been in place for the last year.” Nathan said about how the Q2 results can help Priceline Group Inc (NASDAQ:PCLN).
He was worried about the ‘head and shoulders’ pattern of the stock and Nathan said that if it tests the neckline, it would be bad and there can be a low. The implied volatility for Priceline Group Inc (NASDAQ:PCLN) was very low in June as compared to the six month average of 41. So at this volatility rate, an investor can buy options to express a direction-duo. So at a stock price at around $1240 you can buy August $1300 – $1400 call spread for about $20 which would be your max risk and it would turn into gains somewhere in between $1320 – $1400, which would be equal to the previous high.