Trading Strategies for Airbnb Stock Before And After Q4 Earnings

Airbnb, Inc ABNB was trading about 2.6% higher Tuesday as the company heads into its fourth-quarter earnings print after the close.

When Airbnb printed a second-quarter EPS beat Nov. 2, the stock dropped 2.53% the following day before surging more than 20% over the subsequent eight trading days.

For the third quarter, Airbnb reported earnings per share of $1.79 on revenues of $2.88 billion, beating a consensus estimate for EPS of $1.45 on revenues of $2.84 billion.

For the fourth quarter, analysts, on average, estimate Airbnb will report earnings per share of 25 cents on revenues of $1.86 billion.

On Jan. 25, BofA Securities analyst Justin Post maintained a Neutral rating on Airbnb and raised the price target from $125 to $130. The new price target suggests about 10% upside for Airbnb.

From a technical analysis perspective, Airbnb’s stock looks bullish neutral into the event, having regained the 200-day simple moving average (SMA) but negating its uptrend. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

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The Airbnb Chart: Airbnb burst up through the 200-day SMA on Jan. 27 and on Friday, the stock retraced to back test the level as support and bounced. The back test of the 200-day caused Airbnb to form a lower low, which negated the uptrend.

• It’s healthy that Airbnb retraced to the 200-day and held above the area. On Monday and Tuesday, the stock spiked higher in response. If Airbnb is able to break up above the Feb. 3 high of $121.40, the stock could be setting into another uptrend, which would indicate Friday’s fall was a bear trap.
• In Tuesday, Airbnb was working to print a bullish Marubozu candlestick, which could indicate higher prices are in the cards for Wednesday. The second most likely scenario is that the stock trades sideways to form an inside bar pattern, which would lean bullish for continuation.
• If Airbnb suffers a bearish reaction to its earnings print and falls under the 200-day SMA, the recent bullish price action may serve as a bull trap and the stock will confirm a downtrend is in play.
• Airbnb has resistance above at $121.50 and $130 and support below at $110.44 and $104.42.

Photo courtesy of Airbnb.