PayPal to $76

BATS:PYPL   PayPal Holdings, Inc.
PayPal is signaling bullish reversal at a great value. After a two-year long hemorrhage in stock value, multiple indicators and patterns forecast a recovery. A descending wedge can be found on the 1D chart and as we are nearing the final squeeze of the wedge, an inverse head and shoulders has formed.

Utilizing Fibonacci retracement levels supported by bullish trading patterns and indicators (OBV & MFI), the ascent to $76 appears both realistic and only the beginning of a long awaited rally. Should my projections prove accurate, I believe there will be one more opportunity to profit from put options as the right shoulder peaks around the $57-$59 range.

Trade active:
PYPL The current dip is necessary to complete the inverse H&S and was not unexpected from a technical analysis. I find it strange that multiple investment banks have downgraded PayPal even though the company hasn't released any negative news nor had its Q1 Earnings Call yet.

I don't want to spread misinformation so I will leave this as a coincidental observation for now. However, I will be on the lookout for PayPal stock upgrades when its share value begins to ascend back to the neckline. I have noticed this type of reactivity before so there is a good possibility that investment firms' buy-ratings are sensitive to micro price fluctuations which, if true, is highly reactive and suggests their effectiveness is questionable.
Trade active:
I believe we have another week or two at the current price levels. I will be watching for a temporary recovery to $60.80 - $61.15 price range. I believe it is temporary because the share price is rising on dwindling volume. The Money Flow Index (MFI) is also approaching overbought territory.

In addition, a short-term recovery to these levels would forecast the setup for a double bottom "W" pattern if the share prices declines back to the $57.50 range. It is my opinion that at this level, PYPL will experience significant recovery and begin the journey to $76.

However, I will be weary of any high-volume breakdowns that take the share value below $57. I am bullish on PYPL but there is another double bottom presenting itself should the current inverse head and shoulders fail. The large double bottom suggests that a share value near $50 is possible if this occurs.

Watching indicators and overall market sentiments will be the best way to determine which path the stock is currently on. At this point in time I don't believe entering another short-term trade would be savvy. At least not until the market reveals its sentiments around the projected $57 support.


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