Shares of Tripadvisor (TRIP) are coming under indirect pressure at the $26 level, after bouncing off the $20 mark earlier this month – their lowest level since November 2020. Security has struggled during of the past 12 months, as indicated by its 48.2% year-over-year deficit, and it now looks like it could be heading back down. In fact, Tripadvisor stock just approached its historically bearish 80-day moving average, a trendline that has put pressure on TRIP in the past.
According to research by Schaeffer senior quantitative analyst Rocky White, TRIP has approached this trend line eight times in the past three years. Stocks posted a negative one-month return after 87% of these signals, with an average decline of 10.3% during this period. Last seen down 1% to trade at $25.64, a similar move from its current perch would put TRIP near the $23 mark.
Analysts are already bearish on TRIP, with eight out of 10 hedges rated lukewarm “hold” or worse. Short sellers have also been building up equity lately. Short interest has increased by 11.9% over the past two reporting periods, and the 13.04 million shares sold short now represent 12.9% of the stock’s free float, or nearly a week of pent up purchasing power.
A slackening of optimism in the option wells, however, could create additional headwinds for Tripadvisor stocks. On the International Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), TRIP’s 10-day call-to-sell volume ratio of 16.19 tops all readings from last year, except 4%. This indicates that calls have been picked up at a much faster rate than usual over the past two weeks.