Airbnb Stages Reversal Amid Renewed Interest In Reopening Stocks: What's Next?

Airbnb Inc ABNB shot up almost 10% higher on Monday following the FDA approval of the Pfizer-BioNTech COVID-19 vaccine. The online lodging agency, like many other stocks in the travel and tourism sector, has failed to significantly rebound after the spread of the delta variant substantially increased and spooked investors over the summer.

That may be set to change, however, as the global vaccination effort continues to ramp up.

See Also: Airbnb And Airbnb.org To Provide Temporary Housing For Afghan Refugees

The Airbnb Chart: Airbnb had been consolidating sideways in a tight range between $130 and $157 since May 19 when the stock bottomed following a sharp decline from the Feb. 11 all-time high of $219.94. On Monday, big bullish volume came in and pushed Airbnb up through the $157 level, which allowed it to make a higher high on the daily chart. The stock then slammed into a resistance level at $161.83 and closed the trading slightly below it.

On Tuesday the stock was attempting to break above the level. Airbnb will need sustained volume throughout the day to close above $162.

On Monday, 22.09 million shares of Airbnb traded hands compared to the 10-day average of 7.89. The big move up in share price combined with high volume indicates the bears are in control and the stock is likely to rise further.

The move north also caused the stock to print a bullish Marubozu candlestick, indicating higher prices could be in the cards although consolidation will be needed along the way.

Airbnb’s relative strength index (RSI) hit near 67% on Monday and Tuesday, which is close to what technical traders consider overbought territory. When a stock’s RSI rises over the 70% mark it is often a sell signal and traders will take profits and plan to buy back lower when the RSI and stock price correct to the downside.

Airbnb is trading above the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading above the 20-day simple moving average which is a good sign for the bulls. Longer-term moving averages aren't available for Airbnb because it only went public on Dec. 10, 2020.

• Bulls want to see Airbnb consolidate to lower its RSI slightly and then for big bullish volume to come in and drive the stock up over resistance near $162. If Airbnb can regain the level as support, it has room to move up toward the $173 level.
• Bears want to see big bearish volume come in and drop Airbnb’s stock down below the $157 level, which could indicate Monday’s move was a bull trap. If Airbnb were to fall back under the $151 area it could revisit $141 before potentially bouncing.