Neutral - watching gradual downtrend/50-week EMA
Not buying today despite the discount because a gradual downtrend has formed. As long as that pattern holds, it will continue to make lower highs and lower lows over time (doesn't sound fun). That said, if it can eventually break out of the downtrend (which is currently running next to the 50-week EMA), I would consider starting a position (even though it would be at a higher entry). Anyway, I'll keep an eye on for a weekly and/or monthly close decisively (with volume) above that level.
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I excluded the April 2022 candle because that was part of a sharper downtrend from the all-time high. Here's a monthly chart showing all historical price action.
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Another way it could possibly eventually break out would be by trading quietly sideways for a while. I'd say that would be the ideal set up to trade on. But anyway, just watching for now.
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Tweaked the trend line slightly to reflect weekly closing prices. I'm disregarding the candle from the week of 1/22/24 because, while I'm cutting it off slightly, it was turned back at the 50-week EMA and closed lower.
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The trend line is still close enough to the 50-week EMA that I would use the 50-week EMA as a signal to trade on instead.
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I was out of town last week but I'll be looking to start a position in PayPal on Monday as I see it closed above the 50-week EMA (nice monthly close as well). Not sure on a price target ATM. My initial thought is that this is only a one and a half year downtrend, so maybe it can test the 200-week/50-month EMA (which is currently just over $100 and would be about a 50% return).
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Started a position in PayPal just now. If it can rise fairly quickly to the 200-week/50-month EMA, then I'll probably just sell there. If it spends some time trading sideways, I may raise that target. I could also set a fairly tight stop loss of a weekly close back below the 50-week EMA but not sure on that yet.
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I've thought about the potential stop loss more. Right now, we're just below the 50-week EMA but close enough I would continue to hold. If it closes significantly below the 50-week EMA I'll probably sell and wait for a more meaningful close back above the 50-week EMA to re-enter. As I've already said, I'd rather see it trade sideways for a while, so if I get stopped out, I may just wait and see if that sets up. Anyway, holding for now.
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This trade is not looking good at the moment but I'm going to hold and see how the rest of this week plays out. If it sells off significantly I may just continue to hold and average down at some point. If it stays around where it is now ($63) or a little lower then I'll probably sell out for a minimal loss and continue to keep an eye on it.
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Probably selling today as it's been turned away around the 50-week EMA, also updated the trendline. Will continue to watch and maybe look to re-enter depending on how it sets up.
Trade closed manually:
Officially sold out of my position just now, will continue to keep an eye on though.
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Back above the 50-week EMA, I got faked out pretty hard that's for sure but didn't have much invested in this yet anyway. Earnings coming up tomorrow looks like before the open. Probably will move decisively, anyone's guess which way... If it pops higher, I'll look to eventually get back in on a potential gap fill. If it drops lower, I'll continue to wait. And if I miss out, oh well. Good luck!