Don't Ignore This Chart!

Paypal Guns for a New High


Stocks making new 52-week highs are clearly in uptrends and leading. Even though Paypal is just shy of a 52-week high, the bigger uptrend and wedge point to new highs in the near future.

First and foremost, Paypal is in a long-term uptrend because the 50-day EMA is above the 200-day EMA and the close is above the rising 200-day EMA.

After hitting a new high in late January, the stock corrected with a large falling wedge into mid May. This correction was needed to work off the overbought conditions created in January. The falling wedge is a typical pattern for a correction and the breakout near 80 signaled an end to this correction.

This breakout argues for a continuation of the bigger uptrend and I would expect new highs in the coming weeks and months. The breakout zone around 80 turns first support to watch on a throwback (test of the breakout). A move into this zone could present an opportunity.  

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Topics for June 19th

  • The Single Biggest Influence on Individual Stocks
  • Seasonality and Sector Divisions (XLI, XLF)
  • Watching Two Risk-Off Assets
  • HON and UTX Stall as CAT Breakout Fails
  • Tech Leaders (PFPT, ADSK, ACN, ADI)
  • Exchange Leaders (NDAQ, CME, CBRE, ICE)
  • Click here to Watch on Youtube

Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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