Paypal has bounced folks, time to get on board!
I've been watching Paypal's long slide downwards for what seems like forever. Well, I am calling a bottom, and I am doing it just prior to today's earnings announcement after close. Here is PYPL on the weekly bars, and here are the reasons for my stance:
1) Double top pattern established. From the height of this pattern we can make a reasonable estimate of the bottom by mirroring it downward from the base of the pattern.
2) Price bottomed right at the 66% (2/3) retracement of the prior large wave's height. Retracements generally fall between 33%-66%, so this reinforces the double top pattern completion stated above.
3) Weekly 200 SMA bounce. As you can see, it bounced neatly on the 200 SMA. This isn't the daily, it's the WEEKLY 200 SMA. This is a very long term line and means a great deal.
4) Weekly RSI is oversold. I listed this last, simply because it's been oversold for a long ass time now. Still, it's one more factor working to build the case for a long position.
The wild card here is earning's..... which come out in like 5 hours from how. This is why I wanted to get this out there. I think the earnings are going to be strong and it's set to jump.
If the entire market turns belly up, though, I will probably exit all long positions no matter how bullish their individual charts may be. It's just too hard to swim against the trend, which may very well be in the process of turning downward.
1) Double top pattern established. From the height of this pattern we can make a reasonable estimate of the bottom by mirroring it downward from the base of the pattern.
2) Price bottomed right at the 66% (2/3) retracement of the prior large wave's height. Retracements generally fall between 33%-66%, so this reinforces the double top pattern completion stated above.
3) Weekly 200 SMA bounce. As you can see, it bounced neatly on the 200 SMA. This isn't the daily, it's the WEEKLY 200 SMA. This is a very long term line and means a great deal.
4) Weekly RSI is oversold. I listed this last, simply because it's been oversold for a long ass time now. Still, it's one more factor working to build the case for a long position.
The wild card here is earning's..... which come out in like 5 hours from how. This is why I wanted to get this out there. I think the earnings are going to be strong and it's set to jump.
If the entire market turns belly up, though, I will probably exit all long positions no matter how bullish their individual charts may be. It's just too hard to swim against the trend, which may very well be in the process of turning downward.
Trade active:
I am effectively trapped into this trade and it sucks. I normally don't get myself into this position. Anyone who has any solid Paypal analysis (fundamental, technical, some graffiti you read scribbled on a bathroom stall) I'd be much obliged as I am very much struggling with what to do at the moment.
I've decided to stay in it for the moment because the volume is unbelievably high to the point that I can't help but think most people who were interested in selling have already smashed that button. It also must have plowed down through a LOT of stop losses.
So, yeah. 25% down and I am riding this thing out for better or worse. I abhor selling low and I think there's a greater chance than I'd be doing just that than otherwise. Can it go lower? Hell yes. Will it go lower? Maybe. Do I feel like I want to puke right now? Absolutely.
I've decided to stay in it for the moment because the volume is unbelievably high to the point that I can't help but think most people who were interested in selling have already smashed that button. It also must have plowed down through a LOT of stop losses.
So, yeah. 25% down and I am riding this thing out for better or worse. I abhor selling low and I think there's a greater chance than I'd be doing just that than otherwise. Can it go lower? Hell yes. Will it go lower? Maybe. Do I feel like I want to puke right now? Absolutely.
Trade active:
I'm definitely staying in the trade. Despite Facebook trying to wreck the market with their Meta-Reverse initiative I think Paypal has about hit bottom at $127. There are numerous volume-associated indicators I use that are indicating rather strong accumulation and I think institutions are willing to go long at this price. I would actually double down the bet if I weren't so worried about the macro-market headwinds that may re-develop. A lot hinges on Amazon's earnings report this afternoon at 4:30.
Trade closed: stop reached:
I was wrong on a lot of levels and I was stopped out at $110. I have pulled all longs from the market entirely except commodity based ones, and here's why:
www.tradingview.com/...-we-re-peering-into/
www.tradingview.com/...-we-re-peering-into/
I mean..... one of the quotes was "2021 was one of the strongest years in PayPal’s history", said President and CEO Dan Schulman.
They missed EPS expectations by a penny. A penny! They beat sales expectations. So one penny ($1.12 expected EPS vs $1.11 reported) caused Paypal to drop nearly 20%? I'm obviously missing something here and if anyone knows exactly what the smoking gun was that caused this debacle please let me know.
I hate holding anything through earnings and have made it a rule not to, simply because it is such a crap shoot. I just got a beatdown for breaking one of my own rules. I don't know whether this is an even better buying opportunity or to cut my losses entirely.
Time for a beer.