TRVG Stock: If Only the Markets Would Just Cooperate
November is drawing to a close, and the seasonal rally that usually starts around this time has yet to show its face. In fact, the seasonal rally that I have been expecting has been completely absent. Instead, the markets continue to slide. This is disappointing, to say the least, but I have not given up hope yet.
This is still that festive time of year where the markets have a tendency to appreciate. That’s why I continue to believe that some sort of rally is going to take hold. I am not expecting new highs, just something that strings together a couple of bullish trading days in a row, leading to a positive week or two so it stops feeling like we are falling into an abyss.
I am going to assume that at some point in the next couple of weeks, the markets are going to stage an advance. In light of this assumption, I have decided to focus on Trivago NV – ADR (NASDAQ:TRVG) stock.
The reason why I chose this stock in particular is because I believe that Trivago stock is setting up to take advantage of any headway that the markets are likely to make.
My beliefs are based on the position that TRVG stock currently sits in, and a technical signal that was just generated. Both of these indications are suggesting that this stock is poised to make a move toward higher Trivago stock prices.
The following Trivago stock chart illustrates that TRVG stock currently sits right on the top of a popular price metric.
Chart courtesy of StockCharts.com
The price metric highlighted on the chart above is the 200-day moving average. The 200-day moving average is a metric that investors and analysts alike use to determine whether a stock is in a bullish state or a bearish state.
A bullish state suggests that a stock is geared toward higher prices. A bearish state suggests that a stock is geared toward lower prices. Using this metric is quite simple because deciphering between these two polar opposites is as easy as pinpointing which side of the moving average the stock is trading on.
For instance, Trivago stock first attempted to break above the 200-day moving average in mid-September. This was the stock’s first attempt to ever break above the 200-day moving average; it has never traded above this metric. That is why TRVG stock has been in a bear market for the most part of its publicly traded career.
This first attempt was a valiant one, but the selling pressure that hit the markets in early October caused the stock price to trade back below it. The second attempt in late October was successful.
Following this breakout above the 200-day moving average, TRVG stock tacked on an additional 21.61% in gains before a correction took hold. This correction is why Trivago stock currently sits right on top of the 200-day moving average, testing it from above.
Returning to test a previous a breakout point is called a backtest. Backtests are very common, and they end up establishing new levels of price support. Backtests also act as launching pads, which is why it would not be the least bit surprising if TRVG stock bounced right off this moving average and began staging an advance.
The timing of this advance would be perfect, because a signal was just generated, suggesting that a new bull market is now in development. This newly generated signal is highlighted on the following Trivago stock chart.
Chart courtesy of StockCharts.com
The chart above highlights a signal that is generated when the 50-day moving average crosses above the 200-day moving average. This signal is called a golden cross. When one is generated, it simply suggests that a new bull market is now in development.
The golden cross highlighted on the chart above was generated on November 14. It is reinforcing the notion that Trivago stock now is geared toward higher prices, as suggested by the breakout above the 200-day moving average that occurred on October 25. These signals and where the stock currently resides are why I believe that if the market can finally cooperate and rally, TRVG stock will outperform.
Trivago stock has generated a number of technical signals that currently suggest that the stock is likely to appreciate. The problem is that the market conditions are not exactly favorable for such an outcome. That is why I believe that as soon as the markets find their footing, TRVG stock will outperform.