EBAY shares are currently testing a key resistance level, as price is moving around the $57/share area. This ceiling has been tested twice since July and a surge in buying momentum might trigger an upside breakout.
MACD is already in the overbought zone, hinting at an exhaustion of the rally. However, the indicator hasn’t crossed lower yet, which suggests that buying pressure is still present for now. RSI is also in the overbought area but is showing further upside, which could mean more rallies for EBAY shares.
EBAY Shares Outlook
An upside break from resistance could lead to a move until the $60/share area, which might hold as a psychological resistance level. Traders expect strong sales from Ebay as the Christmas holidays are approaching, which would mean increased online shopping activity.
Apart from that, the Santa Claus rally is expected to kick in soon and possibly last until early next year. This could mean more upside for US equities, especially since the US economy has shown strong recovery prospects recently.
A selloff from the current levels, however, could lead to a test of the nearby support zone at the SMAs. The 50 and 200 simple moving averages are criss-crossing and moving sideways, reflecting potential range-bound movement. These indicators have held as dynamic inflection points in the past and may continue to act as areas of interest.
In that case, EBAY shares could find support at the $53/share level if the stock sells off from the resistance at $57/share. A break below the SMAs would suggest more losses for the stock, possibly until the next support at $51/share.
The path of least resistance is to the upside though, as things are looking up based on the US retail sales report for November. For today, consumer sentiment data is due and more improvements could bode well for US equities, including EBAY shares.
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