Ebay, Ready for a New High?

eBay, Wall Street, Dow Jones, S&P500

eBay, Wall Street, Dow Jones, S&P500A stock that I particularly like at Wall Street is eBay (ticker: EBAY). From a technical analysis point of view, from the highs of the beginning of October, the share fell within a bearish channel, by slightly less than, going to test an important support in the $ 34.00 area, and then it has rebounded.

In yesterday's session, eBay broke the trendline resistance of the bearish channel upwards and today made a pullback to then close unchanged at $ 36.83 (+$ 0.02), as you can see from the chart below.

eBay, Wall Street, Dow Jones, S&P500


From the graphical point of view, there is only one negative aspect, the Falling Window (a Candlestick pattern), or more commonly called gap down, on which the share is located and which acts as resistance ($ 36.94). A closing (with high volumes) above $ 37.00 could give the force for a return at least in the $ 39.00 area where the next static resistance passes. After that, there are new highs for eBay.

For the time being, I recommend waiting for a close above $ 37.00 before opening up bullish positions, either directly on the share, or with options strategies. As said, the first target is $ 39.00 area, while a close below $ 34.00 would sound like a dangerous alarm bell. In that case, better close any bullish positions.

To close, from a fundamental point of view, eBay has a P/E of 5.17 that indicates a significant discount compared to an average of 42.50 for the Internet Software & Services industry and compared to the S&P 500 average of 25.55. The Quick Ratio is above 2 (2.10) which shows the ability to cover any short-term cash needs. eBay does not distribute the dividend.

eBay has a medium/low volatility which makes it a very quiet share, to keep in the portfolio also in the long run. The next earnings will be announced on January 24, 2018.


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