Ebay shares recently made a strong rally to $29/share before retreating and moving inside a consolidation pattern. This tight range suggests that another leg higher might be seen, especially since stochastic is already indicating oversold conditions and might draw buyers in.
RSI is still on the move down, which means that there could be enough selling pressure left for a larger pullback. If so, Ebay shares could retreat until the broken resistance around $26/share, which is also in line with the 100 SMA. This short-term moving average is still above the 200 SMA so the uptrend could stay intact.
On the other hand, a break below the moving averages might be possible and this would signal a reversal taking place. However, there are other support levels located around $24-25/share and these areas could contain buy orders waiting to catch the longer-term climb.
Ebay Shares Forecast
A number of company updates since the split in operations from PayPal might still weigh on Ebay shares, as the company said that it would no longer carry on with the same-day delivery service, along with its fashion, motors, and valet apps. Ebay will instead explore other delivery and pick-up and drop-off programs that are relevant to its customer base of 25 million sellers, and that cover a wider variety of inventory.
“We’ve found that the types of things that people buy on eBay aren’t necessarily those that are in high demand for same-day delivery, and that same-day options for the most part exclude core eBay sellers who don’t have offline locations,” explained an eBay spokesperson, detailing the reasons behind eBay Now’s closure. “We want to enable the most relevant solutions for our customers, and offer those that are most in line with local shopping and delivery preferences around the world.”
Apart from that, the company also shed a few thousand jobs in connection to the Ebay-PayPal split and investors believe that there will be more cuts down the line. This could allow the company to focus more of its funds into developing online shopping services and pave the way for more expansion opportunities later on.