Ebay stock underwent a significant rally last month and has been stuck in consolidation for most of August. Price could still see a continuation of the recent strong climb though, provided it breaks past the current consolidation pattern.
The sideways movement could indicate hesitation among buyers, especially since the recent yuan devaluation could mean more expensive import prices from the online seller to China, which might then weigh on demand and revenue. However, stochastic is moving up, suggesting that further upside is possible.
The 100 SMA is also above the 200 SMA, confirming that the uptrend is still intact. RSI is pointing up as well, suggesting a return in buying pressure sooner or later.
EBAY Stock Outlook
Investors have already been keeping close tabs on the bullish flag on Ebay stock for quite some time now, and the fact that the small downside break failed to see follow through suggests that buying interest is pretty strong. A move past the $29/share level could seal in more gains for Ebay stock.
There have been no catalysts for an upside break, although the break between Ebay and PayPal operations could set the stage for more concentrated efforts among the companies. This could mean better efforts at e-commerce for Ebay, which is moving on to test new features.
As it turns out, the recent dip was spurred by a large block of selling on Ebay stock, which had a negative money flow worth $3.09 million in a day. If this results to a larger decline, the stock could still draw support from the rising trend line connecting the recent lows visible on the 4-hour time frame.
This trend line lines up with the 100 SMA, which might also hold as a dynamic support area. A break below this level, however, could be a signal that a long-term downtrend is about to take place.
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