EBAY Stock Testing Range Support – May 26, 2014

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EBAY Stock Testing Major Support

EBAY Stock Testing Major Support

On its weekly time frame, it can be seen that EBAY stock is still moving inside a trading range. The stock price has bounced off support at $50.00 and has encountered resistance near $57.50.

EBAY stock is also drawing some support from the 50 SMA (simple moving average) with MACD in the oversold area and indicating a possible bounce. RSI is also reflecting oversold conditions, hinting at another rally back to the top of the range.

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EBAY Stock Forecast

A bounce from the current support levels or a buy order for EBAY stock at $50.00 could lead to gains up to the $55.00 to $57.50 area. However, a breakdown could be indicative of a longer-term selloff.

Bear in mind that EBAY stock is currently under a bit of selling pressure as the company faces security troubles on their website. A hacking incident forced the company to tell its users to change their passwords after the data breach that started in February.

The attackers compromised a “small number of employee log-in credentials,” eBay said, to gain access to its network, then scoured the firm’s systems before making off with the database. The San Jose, Calif. company discovered the break-in earlier this month. The company has an FAQ for the security problem on its website.

A deeper selloff could lead to a drop that’s about the same size of the range, which suggests that a break below $50.00 could lead to a selloff until the $45.00 levels. On the other hand, an upside break from the range could similarly lead to $5.00 gains per EBAY stock, although this scenario is less likely to take place.

News of the IPO of Alibaba, a Chinese e-commerce company, could also wind up hurting demand for EBAY stock.