PayPal shares have been moving sideways for quite some time, consolidating in what appears to be an ascending triangle or flag formation on its 1-hour chart. Price is currently testing the bottom of the pattern which might continue to hold as support and spur another test of resistance at $34/share.
Stochastic is moving up, suggesting that buyers are in control of price action. Similarly, RSI is heading higher, which means that there’s enough momentum left for a potential upside break. If that happens, PayPal shares could climb up to the next resistance around $38/share.
On the other hand, a break of support could lead to a test of the previous lows around $30/share, although there seems to be no major catalysts similar to what spurred the spike lower a few weeks back. Nonetheless, the 100 SMA is below the longer-term 200 SMA, suggesting that the path of least resistance is still to the downside.
PayPal Shares Outlook
News that US gambling sites are now accepting payments and withdrawals through PayPal could mean more revenue for the company, which has recently split from Ebay. This could keep PayPal shares supported, as a large part of earnings could be comprised of volume from these gambling sites.
Recall that PayPal has prohibited transactions related to gambling websites back in 2003 when it had a merger with Ebay. For now, a PayPal spokesperson has clarified that the company is currently testing integration with four major gambling sites.
PayPal is still accepting transactions from approved EU gambling sites, although its return to the US could spur more revenue for the company and gains for PayPal shares. The online company is also facing stiff competition from cryptocurrency exchanges that are more open to facilitating transactions from gambling websites through the use of bitcoin or litecoin.
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