Trip.com Plunges 5.53%: What's Fueling This Sudden Downturn?

Summary
• Trip.com (TCOM) trades at $58.72, down 5.53% from its previous close of $62.16
• Intraday range spans $58.44 to $61.86, reflecting sharp volatility
• Analysts project a 22.27% upside to $76.00, yet sentiment turns bearish

Today’s dramatic selloff in Trip.com has sent shockwaves through the travel sector. The stock’s 5.53% drop—its largest intraday decline in months—has raised urgent questions about its fundamentals and technical setup. With a net cash position of ¥35.9 billion and a 158% free cash flow to EBIT ratio, the company’s balance sheet appears robust. Yet, the bearish technical indicators and recent analyst downgrades suggest a critical juncture for this once-bullish name.

Bearish Technicals and Analyst Divergence Trigger Flight
Trip.com’s collapse stems from a confluence of bearish technical signals and shifting analyst sentiment. The RSI of 42.15 and MACD histogram of -0.24 indicate oversold conditions and bearish momentum. Meanwhile, the stock’s price action—trading below its 30-day moving average of $61.74 and 200-day MA of $63.69—has triggered stop-loss cascades. Compounding this, recent analyst activity shows a 15.63% increase in short interest and a downgrade from Wall Street Zen to 'Hold,' signaling waning confidence despite a 'Buy' consensus. The bearish K-line pattern and Bollinger Band compression below the middle band further validate the selloff.

Travel Sector Volatility: Booking Holdings (BKNG) Stabilizes Amid TCOM’s Plunge
While Trip.com’s 5.53% drop dominates headlines, the broader travel sector remains mixed. Booking Holdings (BKNG), the sector leader, trades down 0.50% at $2,185.50, suggesting sector-wide caution but not panic. TCOM’s sharp decline outpaces BKNG’s muted move, highlighting divergent investor sentiment. The travel ETF (if available) would typically provide context, but TCOM’s standalone volatility points to specific catalysts—namely, technical breakdowns and short-covering pressures—rather than macroeconomic shifts.

Bearish Playbook: Options and ETFs for a Volatile TCOM
• 200-day MA: $63.69 (below) | RSI: 42.15 (oversold) | MACD: -0.24 (bearish) | Bollinger Band: $60.46–$64.94 (below middle band)

Key levels to watch: The 30-day support at $58.64 and 200-day resistance at $62.26. Short-term bearish momentum suggests a test of the $58.44 intraday low, with potential for a rebound if buyers emerge above $60.46. The options chain reveals two high-conviction plays:

• TCOM20250919P55 (Put, $55 strike, 2025-09-19):
- IV: 34.03% (moderate)
- Leverage: 50.96% (high)
- Delta: -0.26 (moderate bearish exposure)
- Theta: -0.0114 (slow decay)
- Gamma: 0.0475 (responsive to price swings)
- Turnover: 129,369 (liquid)
- Payoff at 5% downside ($55.78): $0.78 per contract
- This put offers asymmetric upside if TCOM breaks below $58.64, with high leverage amplifying gains.

• TCOM20250919C65 (Call, $65 strike, 2025-09-19):
- IV: 37.49% (moderate)
- Leverage: 58.60% (high)
- Delta: 0.24 (moderate bullish exposure)
- Theta: -0.0385 (aggressive decay)
- Gamma: 0.0412 (responsive to rebounds)
- Turnover: 147,748 (liquid)
- Payoff at 5% downside ($55.78): $0.00 (out-of-the-money)
- A speculative call for a rebound above $60.46, leveraging high gamma for rapid premium gains if buyers return.

If $58.44 breaks, TCOM20250919P55 offers short-side potential. Aggressive bulls may consider TCOM20250919C65 into a bounce above $60.46.

Backtest Trip.com Stock Performance
The backtest of TCOM's performance after a -6% intraday plunge shows favorable short-to-medium-term gains. The 3-Day win rate is 52.59%, the 10-Day win rate is 54.16%, and the 30-Day win rate is 60.13%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 6.86%, which occurred on day 59, suggesting that TCOM can recover significantly from such events.

TCOM at Crossroads: Watch $58.44 Breakdown or Analyst Reentry
Trip.com’s 5.53% plunge reflects a critical inflection point. While the company’s balance sheet remains strong, the bearish technical setup and rising short interest suggest near-term vulnerability. Investors should monitor the $58.44 intraday low as a key support level; a break below this could trigger further selling. Conversely, a rebound above $60.46 may attract buyers, especially if analysts reiterate their 'Buy' consensus. The sector leader, Booking Holdings (BKNG), at -0.50% provides a benchmark for broader sentiment. For now, the path of least resistance appears downward—position accordingly.