Ebay shares are still on an uptrend, with price moving inside an ascending channel on the 4-hour time frame. The stock just came off a test of the channel resistance and looks poised to test support once more.
Price could also draw support from the moving averages, with the 100 SMA keeping losses in check at the moment. A lower pullback could last until the 200 SMA, which is closer in line with the channel support at the $58-59/share level. Note that the 100 SMA is still moving above the 200 SMA, confirming that the uptrend could carry on.
Aside from that, stochastic is moving up from the oversold area, suggesting that a climb is likely and that buyers are starting to push prices higher. Similarly, RSI is climbing higher, which means that price action could follow suit.
Ebay Shares Forecast
This month, Ebay shares will start trading separately from PayPal stock, which will be under the ticker PYPL. This could draw more investor demand for the online retailer, which would be focusing more on this aspect instead of online payments.
An independent eBay will be able to focus exclusively on its core business of developing and operating an online marketplace. As of the most recent quarter, eBay had 157 million active buyers, a number that’s grown at a 12% annualized rate over the past three years. Revenue has grown by $1.4 billion from 2012 to 2014, and the company’s free cash flow has increased at an impressive 32% annual rate.
Earnings reports for the second quarter are up for release soon and this should provide a better idea of how Ebay shares could trade in the weeks ahead. Strong data could renew demand for the stock, which might bring prices up to the channel resistance at $63-64/share or higher. However, weak figures could lead to a downside break and a longer-term selloff for Ebay shares.
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