Stock of the day: eBay

We wrap up the week with a look at eBay, which we’d previously analysed in mid-February. Back then, the price was around 58 USD and we were bearish, saying:

“Sentiment on eBay is negative, and it feels safe to say that the price should soon test the 50% Fibonacci. The bearish scenario will be cancelled when the price breaks the green down trendline, but chances are rather limited.”

That was a great call because over the next several days, the price dropped. On March 11^th, eBay was trading below 50 USD, and that happens to be a local bottom for now. The reason we’re mentioning eBay now is because we see signs of a bullish reversal.

Over the past few days, eBay has managed to break two important resistances. The first one was the mid-term down trendline (green) and the second one was the horizontal resistance on the 56.5 USD (yellow). Both of those breakouts triggered a buy signal and allowed us to become more optimistic about the future of eBay shares.

The buy signal cancels when the price comes back below the down trendline, but chances of that happening are now limited.