Booking Holdings faces recovery headwinds, share price to trend lower. What should you do?

Booking Holdings Inc. (NASDAQ:BKNG) is trading at $2194. Recently the stock found support at the 50-day moving average currently at $1987. Reference resistance stands at $2480. From the price chart, the stock may have just begun a downward trend as MA-10 and MA-20 trade below the longer-term MA-50 of $2314.

Booking Holdings was expected to start recovery from the coronavirus pandemic effects. Room occupancy rates especially in the US, jumped for the first quarter of this year. However, the growth in occupancy rates stands on unstable ground as the rates fell by about 10% at the beginning of this month.

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The company cites the geopolitical risks in Russia, Ukraine, and also Europe. This analysis finds that the tough economic environment in the US is the leading factor for the decline.

While occupancy rates matter, the price movements are affected by the mega capitalisation of the business. Like many other firms of a similar capitalisation, the size affects the demand and trading activity. As a result, the price takes time to respond to key news in the market. This analysis finds that it may be time for Booking Holdings to consider stock splits that would enhance liquidity on the counter.

Booking Holdings begins a bearish trend

Technical analysis points to the beginning of downward momentum on the price. The moving averages are the first indicator of a trend reversal as the 10-day and 20-day slip below the 50-day. The pattern is then confirmed by the sharp change in the direction of the RSI. The projection is that the price will push down to the 50-day moving average before rising again.

Summary

Booking Holdings began a declining trend. At a price of $2194, it is recommended to sell the stock. Investors can buy back into the stock at the 50-day moving average.

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