PYPL (Major Support Bounce)PYPL PRICE RECAP:
On Feb 2nd, 2022 PYPL sold off to create a massive GAP ranging between $140.57 to $170.76. Ever since this GAP down, PYPL has been in a longterm down trend that has been consolidating into a larger falling wedge formation. PYPL has recently broken out of this longterm down trend / falling wedge. After the breakout, PYPL attempted to make a move to the upside from Jan 27th to Feb 2nd to retest the resistance zone between $90.13 and $92.59. PYPL has now retraced back down towards the support and demand zones near the 2020 lows. This retracement is also a retest of the falling wedge downtrend resistance line turned support. Dating back to 2018, PYPL’s price has bounced from this MAJOR support zone between $68.41 and $73.39 a total of 7 times since then, resulting in some big moves to the upside. Now that PYPL is back at this MAJOR area, it is a great watch for a long term investment opportunity or even a long term LEAPS opportunity. In confluence with PYPL’s price returning to such a strong support zone, price is also within the 78.6% and 88.6% FIB levels, which are very key levels when using fibonacci retracements to make longterm investment decisions. Another piece of confluence is that PYPL has formed and completed a falling wedge at this level, which is a bullish reversal chart pattern. For the final confluence factors, PYPL is displaying bullish divergence on the weekly RSI (shown on chart) as well a possible inverted head and shoulders on the daily/weekly timeframes.
TRADE IDEA:
I am now watching for PYPL to make another move lower between $73.39 and $74.99 to start scaling into some longterm holds. If you have no interest in grabbing and longterm holds on PYPL, you be interested in buying some longterm LEAPS options contracts. If you decide to enter LEAPS do so with an expiration of at least 6 to 12 months out with a first target of $85 0r $90. Stop Loss below $66.17 (break and hold on the daily/weekly)
