After its recent break above the long-term range, Ebay stock is showing signs of retracing to an area of interest. In particular, the share price has retreated to the 50 simple moving average on the daily time frame and this might hold as a dynamic support area.
Just recently, the 50 SMA crossed above the longer-term 200 SMA, confirming that an uptrend is taking hold. MACD is pointing down though, which means that sellers are in control of price action for now and that the correction is still taking place.
Ebay Stock Uptrend
If the 50 SMA continues to hold as support, Ebay stock could bounce up to its previous highs near $61/share and perhaps go for new ones if the uptrend is sustained. RSI is moving down, indicating the presence of selling pressure, but if it crosses from the oversold area, buyers could hop in once more.
In addition, a rising trend line can be drawn connecting the lows since October last year. The recent pullback on Ebay stock also lines up with the 50% Fibonacci retracement level on the latest swing high and low on the daily time frame.
Risk appetite could once again support US equities moving forward, as rate hike expectations for the US central bank have been pushed back. Although the FOMC mentioned that they are already considering policy tightening, their downgraded growth and inflation forecasts suggest that they might wait until September rather than June to hike interest rates.
This could mean a prolonged period of low interest rates and cheaper credit for US companies, which would support spending and lending. This could mean more revenues and profits and easier business investment conditions. However, a drop in risk appetite could still force Ebay shares to test the next support level around the 200 SMA or $53/share.
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