After previously finding resistance at $58/share and selling off, EBAY shares could be due for a quick bounce. Price is testing support at the 200 simple moving average, which has acted as a dynamic inflection point in the past.
MACD is still moving down though, indicating that longer-term selling pressure is present. A downside break from the 200 SMA support could mean a move until the next floor around the $50-51/share levels.
EBAY Shares Forecast
RSI, on the other hand, is suggesting a potential return in buying momentum as the indicator has already reached the oversold region. If EBAY shares are able to bounce off the 200 SMA, price could make another test of of the previous resistance at $58/share. If buying pressure is strong enough, an upside break of resistance might be possible.
The simple moving averages are crossing back and forth for now, indicating that more sideways movement is to be expected. At the moment, the 50 SMA is moving above the longer-term 200 SMA, reflecting a bit of upside momentum.
Much of the US equity movements and price action of EBAY shares hinge on market risk sentiment lately. In turn, sentiment is dictated by the Fed monetary policy bias, as traders anticipate tightening moves later on in the year.
As for the company itself, earnings projections are also driving EBAY shares price action. For Q4 2014, the company is slated to post strong growth in its payments sector due to the pickup in sales over the holiday season. In other sectors though, analysts are expecting to see weakening fundamentals, which might weigh on the outlook even if earnings are strong.
With that, weaker earnings data on Wednesday might lead to a downside break of the current support around $53/share and lead to a move down to $50/share. Strong data, on the other hand, might spark a bounce back to the $56-58/share levels.
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org