Airbnb (ABNB): Bearish Setup or a Bullish Surprise?

5 Nov

After finding support at $113, Airbnb ABNB is experiencing a rapid rise, efficiently collecting all the imbalances left behind from the previous drop. As we approach Airbnb’s earnings report this Thursday, the company is expected to post a year-over-year decline in earnings, despite higher revenues for the quarter ending September 2024. The sustainability of any immediate price changes and future expectations will largely depend on management’s discussion during the earnings call.

While we don’t base our strategy solely on the earnings outcome, it’s crucial to note that a favorable outlook from management could give the stock a short-term boost. Still, despite the potential for this optimism, our analysis remains bearish on ABNB for the foreseeable future.

Technically, the 61.8% Fibonacci level aligns perfectly with the point of control from the past three years, offering a strong setup. If this level is reached, it would also complete the filling of any remaining price imbalances. This makes for a compelling hedge against our other swing-long positions.

We aren’t setting a limit order just yet. We prefer to observe the market’s reaction to the earnings report before making a move. This could mean placing the limit order the following day, depending on how ABNB behaves during and after the earnings call. For now, we remain patient and prepared.