It’s one of the few growth stocks that are working right now, as Airbnb (ABNB) climbs 5% on Wednesday.
The stock is rallying after better-than-expected earnings. Even more impressive is the fact that the stock is rallying as the overall market is under pressure.
But that’s not surprising when looking at the chart, as the stock has been outperforming on the upside, up 34% over the last few weeks before today’s earnings rally.
Like other travel-related areas we have talked about — like airlines and cruises — stocks in these industries continue to trade higher. That’s even as markets remain under pressure and even as high Covid-19 case counts persevere.
Airbnb is in a unique situation, one that not only benefits from people that have returned to traveling, but those who are traveling and looking for some isolation as well.
Notably, hotel stocks like Hyatt (H) and Marriott (MAR) are also trading pretty well lately.
Now up 42% from the lows, can Airbnb go on to make new highs like the hotel stocks?
Trading Airbnb Stock
Chart courtesy of TrendSpider.com
On Jan. 28, Airbnb stock undercut the prior low from January at $135.76, bottomed, then reversed higher.
That move helped kickstart a significant rally in the stock. A rally in which shares pushed back up through all of the major moving averages, as well as the Day One IPO high of $151.50.
Coming into the report, I was looking for one of two things. Either a pullback down to the 10-day moving average and recent support near $165 or a rally up to and through the 61.8% retracement.
Now we have our answer, as Airbnb stock has cruised through the latter and is trading near $190 at the moment.
From here, I am watching the $186 to $188 area. That level was support in November before turning to resistance in December. Above this area now, bulls would love to see Airbnb stock hold above this zone.
If not, the 61.8% retracement is back in play until some of the short-term moving averages can catch up to the recent rise in the stock price.
While I like the fundamentals of Airbnb, one thing that still worries me is the bear market in growth stocks. No matter how promising an industry is or how good a company is doing, the broader market always has a way of playing an influential role.
That said, if Airbnb stock can continue higher, look for the next target at the 78.6% retracement. Above that and $200-plus is in play, with resistance around $210 and the highs near $212.50.
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