Who doesn’t know Airbnb? Airbnb, Inc., operates a platform for stays and experiences to guests worldwide. The company’s marketplace model connects hosts and guests online or mobile to book spaces and experiences. It primarily offers private rooms and luxury villas. The company was formerly known as AirBed & Breakfast, Inc. and changed its name to Airbnb, Inc. in November 2010.
On March 11 2020, the World Health Organization (WHO) declared the outbreak of coronavirus, known as COVID-19, to be a global pandemic. Since then, the outbreak has evolved rapidly, with governments worldwide taking swift action to slow the spread of COVID-19. Airbnb was affected by this declaration because that meant that his business model would suffer tremendously as travelling around the world would come to a halt. No tourists = no income. At the time, Airbnb was not traded publicly. It was not until last December 2020 that Airbnb IPO happened and created the only imbalance available monthly, around 146 dollars per share.
The meteoric rise of Airbnb across cities since its introduction in 2008 has disrupted major cities’ housing markets worldwide. Some studies demonstrate the increasing trend in rental and property prices that parallels increasing Airbnb activity.
The COVID-19 pandemic presents a unique case study of this stock. Amid growing concern over how the delta variant of Covid-19 could affect people’s travel plans, Airbnb (ABNB) endured another month with monthly demand in control. Why? Because the revenue model of Airbnb is founded on is under significant pressure with the halting of global travel. Regardless of any negative impact that COVID-19 may have had on Airbnb, imbalances are usually created when there is a trending market unless there is over-extension. Airbnb shares may have dropped after investor worries about the impact of Delta variant on travel overshadowed the online rental company’s second-quarter results. Yet, that report didn’t do much, with the monthly imbalance taking control of around $146.
I hold shares of this monster business that will probably become the Amazon of online accommodation reservations.
See Airbnb Stock (NASDAQ: ABNB) analysis below. You will see an imbalance of around $146 that has recently taken control.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and react strongly to those imbalances. Why do you see positive earnings and then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances in gaining control.
Unless you are doing very short-term trading and scalping, you should not worry about fundamentals or earnings announcements on Airbnb Stock (NASDAQ: ABNB).
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has got a name and it’s called the waiting game. We need to patiently wait for the correct scenarios and setups to happen and wait for the price to pull back or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.
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