Trip.com (TCOM) Surges 2.7% Amid Bullish Technicals and AI-Driven Travel Hype – What’s Fueling the Rally?

Summary
• Trip.com (TCOM) trades at $77.70, up 2.696% intraday, nearing its 52-week high of $78.65.
• The stock’s RSI of 69.74 signals strong momentum, while MACD (1.25) and positive histogram suggest bullish momentum.
• Booking Holdings (BKNG), the sector leader, declines 1.54%, highlighting TCOM’s outperformance.

Today’s surge in Trip.com reflects a confluence of technical strength and sector-specific optimism. With the stock trading near its 52-week high and key technical indicators aligning, investors are betting on a rebound in travel demand amid AI-driven operational efficiencies. The travel services sector remains volatile, but TCOM’s performance diverges from peers like BKNG, signaling potential catalysts.

Bullish Technicals and Analyst Optimism Drive TCOM’s Rally
Trip.com’s intraday surge is fueled by a short-term bullish Kline pattern and a long-term bullish trend, supported by a MACD crossover above the signal line (1.25 vs. 0.83). The RSI of 69.74 indicates strong momentum without immediate overbought conditions. Analyst upgrades, including Bank of America’s $85 price target, and Citi’s inclusion of TCOM in its AI cloud demand picks, have amplified buying pressure. The stock’s proximity to its 52-week high ($78.65) further attracts momentum traders.

Travel Services Sector Mixed as TCOM Outperforms Booking Holdings (BKNG)
While TCOM gains 2.7%, sector leader Booking Holdings (BKNG) declines 1.54%, underscoring divergent investor sentiment. TCOM’s rally is driven by AI-driven operational efficiency and analyst optimism, whereas BKNG faces broader sector headwinds. The travel services sector remains fragmented, with TCOM’s strong technicals and strategic AI positioning creating a clear performance gap.

Options Playbook: Leveraging TCOM’s Bullish Momentum with High-Leverage Calls
• MACD: 1.25 (bullish), Signal Line: 0.83, Histogram: 0.42 (positive divergence)
• RSI: 69.74 (approaching overbought), 200D MA: $66.43 (well below current price)
• Bollinger Bands: Price at $77.70, above the upper band ($77.05), signaling overextension.

Key levels to watch: 200D MA ($66.43) as a critical support and 52W high ($78.65) as a near-term resistance. The stock’s RSI and MACD suggest a continuation of the bullish trend, with the 200D MA acting as a psychological floor. For leveraged exposure, focus on options with high gamma and moderate delta to capitalize on volatility.

Top Options Picks:
1. TCOM20260116C80 (Call, $80 strike, Jan 16 expiry):
• IV: 36.49% (moderate), Leverage Ratio: 155.36% (high), Delta: 0.256 (moderate), Theta: -0.253 (high time decay), Gamma: 0.097 (high sensitivity).
• Payoff: At 5% upside ($81.59), intrinsic value = $1.59. Ideal for aggressive bulls seeking leveraged exposure with manageable time decay.
2. TCOM20260220C75 (Call, $75 strike, Feb 20 expiry):
• IV: 24.49% (low), Leverage Ratio: 18.32% (moderate), Delta: 0.6998 (high), Theta: -0.074 (moderate decay), Gamma: 0.055 (moderate sensitivity).
• Payoff: At 5% upside ($81.59), intrinsic value = $6.59. Offers a balance of liquidity and directional exposure, suitable for holding through February.

Trading Insight: Aggressive bulls should prioritize TCOM20260116C80 for short-term gains, while TCOM20260220C75 provides a safer, longer-term play if the stock holds above $75.

Backtest Trip.com Stock Performance
Trip.com (TCOM) experienced a notable intraday surge of approximately 3% on December 14, 2022. To evaluate the stock's performance following this surge, we can consider the following points:1. Earnings Performance: TCOM reported non-GAAP EPS of $0.22, which beat the estimate by $0.04. Revenue for the quarter was $968 million, surpassing estimates by $58.05 million. These results indicate a strong financial performance that could have contributed to the stock's surge.2. Business Recovery: The company's domestic and international business showed strong recovery momentum. Domestic hotel and air reservation revenue saw positive year-over-year growth, with domestic hotel booking revenue increasing by 25% year-over-year. International business also maintained rapid recovery, with overall air-ticket bookings on global platforms increasing over 100% year-over-year. This recovery trend could have positively influenced investor sentiment and driven the stock's upward movement.3. Market Sentiment: The company's robust recovery and better-than-expected financial results would likely have been well-received by the market. Positive news and updates about TCOM's business performance can often lead to increased investor confidence and a surge in stock price.4. Long-term Outlook: TCOM's revenue is forecasted to grow at an average annual rate of 25% over the next three years, compared to a 13% growth forecast for the US hospitality industry. This positive long-term outlook can attract investors looking for growth opportunities, potentially leading to sustained stock performance.In conclusion, TCOM's performance after the intraday surge on December 14, 2022, appears to have been positive, supported by strong financial results, business recovery, favorable market sentiment, and a promising long-term growth outlook.

TCOM’s Rally Gains Legs – Position for a Breakout Above $78.65
Trip.com’s technicals and analyst optimism suggest a sustainable rally, with the 52-week high ($78.65) as the next target. The stock’s outperformance against sector peers like BKNG (-1.54%) highlights its unique catalysts, including AI-driven efficiency and strong institutional buying. Investors should monitor the 200D MA ($66.43) as a critical support level and consider the TCOM20260116C80 call for aggressive upside potential. If the stock breaks above $78.65, it could signal a broader sector rotation into AI-optimized travel services.