Booking Holdings Inc – 40% Shorting Opportunity Not to Be Missed

18 thg 8, 2022

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Fundamental Indicators:

• Sector – Consumer Cyclical
  
• US Business Cycle Stage – late cycle, when this sector is not favourable
  
• Revenue – suffered significantly during pandemic period and 2022 TTM is showing revenue just shy of 2019 level, with 9% average annual rate
  
• Profits – profits, however, have not recovered and considerably lower pre-pandemic high, nearly 70% less than in 2019
  
• Net margin – decent 10.5% but considerably less than in 2019 with over 30%
  
• P/E – extremely high with 55 ratio compared to S&P500 with 21 and Consumer Cyclical sector with 23
  
• Liabilities - debt ratio is at 0.84 which is a little over the norm, Net Debt/ EBITDA is negative – no problems with debt
  
• Conclusion – considering that business is still struggling to recover from the pandemic, with considerable drop in earnings, and being grossly overpriced, it is very likely to correct further
  

Technical Analysis (Elliott Waves):

• Main scenario of this idea suggests that we are still observing development of the global growth cycle which is currently at the stage of forming corrective wave 4 (see higher timeframe graph)
  
• From the point of correction during the Great Financial Crisis in 2008 this company has enjoyed explosive growth with nearly 7000% in stock appreciation
  
• Although very rapid, the whole movement is choppy with a lot of crossings, hence likely to be an Ending Diagonal (see guidelines for Ending Diagonals below)
  
• We are currently observing the formation of wave 4 of this Ending Diagonal, where the first leg is forming as ABC zigzag – wave A as an impulse has completed and wave B is shaping as a complex Running Correction which is normally contained within a channel
  
• Once it reaches boundaries of this channel at a circa $2290 level, we can expect a reversal and unravelling of wave C towards the level of circa $1370 – which may present 40% shorting opportunity
  

This is a higher timeframe to reflect the full history of Booking Holdings Inc and to provide full wave count:
https://www.tradingview.com/x/eHWqh9Su/

This is the link to the guidelines for Ending Diagonals

What do you think about Booking Holdings Inc and its short term prospects?
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