Great Fundamental Story, But Will Gap Support Hold?

Last month, Ctrip.com (CTRP) posted both revenues and EPS well above Wall Street consensus estimates and it came on the heels of an earlier announcement where CTRP was involved in a share swap that resulted in Baidu (BIDU) owning a 25% ownership interest in the Chinese online travel company.  Volatility can be wild in CTRP, so only aggressive traders should consider the stock.  The 17% drop in four weeks since earnings were released is a perfect illustration of the volatility.  The weakness, however, could be presenting an opportunity as CTRP has seen its earnings gap almost entirely filled.  Technically, that can be a very interesting entry level.

Happy trading!

Tom