EBay surged to new highs in mid-August, fueled by optimism about a business turnaround. Now after a pullback, it could be on the verge of a breakout.
Two significant patterns appear on the e-commerce stock’s chart. First, the descending trendline starting on August 30. EBAY tested that resistance the last two weeks and is now challenging it again.
Next you have the rising 50-day simple moving average (SMA) providing support from below. Additionally, notice the candlestick action after that line was tested: a kicker September 14-15, and a hammer on September 20. Both of those bounces occurred around $70.77, near the old high from early July.
Finally, the 8-day exponential moving average (EMA) is trying to cross above the 21-day EMA. That could suggest the shorter-term trend is turning bullish again.
Valuations could be another consideration because EBAY trades for less than 17x forward earnings. That’s lower than most peers on the Nasdaq. It may leave room for multiple expansion if management successfully executes its plan to focus more on high-value customers.
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Two significant patterns appear on the e-commerce stock’s chart. First, the descending trendline starting on August 30. EBAY tested that resistance the last two weeks and is now challenging it again.
Next you have the rising 50-day simple moving average (SMA) providing support from below. Additionally, notice the candlestick action after that line was tested: a kicker September 14-15, and a hammer on September 20. Both of those bounces occurred around $70.77, near the old high from early July.
Finally, the 8-day exponential moving average (EMA) is trying to cross above the 21-day EMA. That could suggest the shorter-term trend is turning bullish again.
Valuations could be another consideration because EBAY trades for less than 17x forward earnings. That’s lower than most peers on the Nasdaq. It may leave room for multiple expansion if management successfully executes its plan to focus more on high-value customers.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.