Part 1

Booking Holdings, Inc. (BKNG)

Company background and financial performance

Booking Holdings Inc. is among the largest online travel companies in the world. The company’s travel-related services offer hotel rooms, airline tickets, vacation packages, rental cars, as well as travel insurance.

Booking has got agreements with hotels, airlines, cruise and transport companies, as well as vacation providers, enabling it to accept bookings on their behalf.
The situation with the coronavirus has hurt the company’s business. Yet, Booking has still managed to report strong financial results even during the pandemic. We are expecting the company’s business to grow in the next few quarters again as people are starting to travel and going back to normal life, which would further boost its share price in the future.

The re-opening of the economy is currently contributing well to the company’s overall bookings on the platform. Moreover, the company’s strong effort towards ramping up its merchant business is also a major positive. Booking’s officials have remained optimistic about the company’s highly variable cost structure and a strong liquidity position and are expecting it to help it in navigating through the current crisis scenario.

As a matter of fact, due to the huge decline in the travel sector, Booking has missed on the past two quarters’ earnings expectations. It was quite expected though considering the lockdown and the fact that people have not been travelling almost at all in the past 14-15 months during the pandemic times.

Yet, as we mentioned above, as the situation with the virus is getting better, we are expecting the company’s business to pick up soon and are much more positive about the upcoming quarters’ financial results.

Technical analysis

The daily chart shows that BKNG stock has been following the overall bullish market sentiment since March 2020, even though its individual financial performance has been quite weak during that period of time. Overall, the stock market is positively correlated and the expectations for the business to pick up steam in the near future have been driving the share price higher ever since.

We could see that the stock was up from $1107 in March 2020 to the $2514 highs in the end of April (127%). In fact, the stock has more than doubled and has been among the best performing stocks during that period of time. Well, quite an impressive rally.

After the massive rally to the upside, the stock faced lots of take-profit interest at that $2514 resistance and that led to a correction to the downside in the past month. Then, the stock found lots of buying pressure at the $2180 support and formed a double bottom figure, giving lots of bullish indications at that point, leading to another strong bullish reaction towards the $2375 and another little correction towards the current levels at $2290. In fact, the lower Bollinger band matches perfectly with the support at $2180 and the RSI and Stochastics are expected to give lots of buying indications at that point. Overall, since we remain very bullish on the stock and believe it offers a decent bullish potential for the next few months, we would be looking to buy BKNG stock and add it to our portfolio close o the support at $2180.

Chart: BKNG

We would start buying BKNG stock at around $2185-$2190, right above the support at $2180 where lots of buying pressure is expected. In case the price drops further, we would be looking to buy more of the stock at around the next major level at $2100 where the diagonal support mark stands. Our initial profit-taking target is set at $2400-$2460, followed by the next target at $2600-$2700 where we would be fully cashing in our profits.

Visa Inc. (V)

Company background and financial performance

Headquartered in San Francisco, USA, Visa Inc. operates a retail electronic payments network on a global basis. In fact, the company as been a leader in the sector it operates for a long time now and it is among the largest payment providers in the world. The company provides transaction processing services to financial institutions and merchant clients through its VisaNet – Visa’s global processing platform. Visa offers a wide range of products, helping its clients develop and offer core business solutions, credit, debit, prepaid and cash access programs for account holders, such as individuals, businesses and government entities.

Visa has been reporting higher than expected earnings growth and has beaten analysts’ expectations in all of the past 4 quarters. With the business going back to normal step by step, we are expecting the purchasing power online to increase and that way Visa would be expected to further boost its revenue and profitability in the future.

Visa beat the Q1 earnings expectations by 9.52%. The stock has outperformed the industry year to date. In fact, the company’s numerous acquisitions and alliances have paved the way for long-term growth and have consistently been driving revenues. Moreover, the company has done lots of technological upgrades in order to enhance its efficiency, which is also a positive. The coronavirus vaccine and the gradual revival of consumer confidence is expected to drive spending, which would expand business volumes in turn and that would boost the company’s revenues and profits. In other words, as the economy goes back to normal levels step by step, customers would increase their purchasing power and activity and that would increase the company’s business and boost profitability.

Technical analysis

The daily chart shows the massive uptrend on Visa stock since March last year when it bounced from the $132 lows to reach the $237 highs in the end of April 2021. In other words, the stock is up 80% since then. After the massive bullish rally, we have seen a bit of a profit-taking correction that led to the price testing the strong support at $220. Yet, it failed to break that key support mark and that motivated lots of traders to start buying at that level, which led to an immediate bullish reaction towards the current $230 mark. The technical indicators are heading higher and giving indications for further potential bullish rallies on the stock. In fact, the lower Bollinger band matches with the horizontal and the diagonal support marks at $220 and giving lots of buying indications. Thus, we have decided to buy the stock but would wait for a bit of a profit-taking correction that could give us a chance to buy at around the $220 support.

Chart: V

We would start buying Visa stock at around $220-$223, right above the support at $220. Should the price drop further, we would be looking to buy more aggressively around the next support at $214 where more buying pressure is expected. Our initial profit-taking target is set at $235-$238, followed by the next target at $252-$256 where we would be taking all profits.


This image has an empty alt attribute; its file name is logo.svg

Add a comment