Don't Ignore This Chart!

eBay Is Worth Revisiting $EBAY


eBay (EBAY) had a nice run from mid-2016 to January 2018, but trended down all of 2018. Since then, though, eBay has wiped out most of that drop and now sits at a pivotal $38. The chart below tells the story better.

The SCTR shows eBay outperforming most other stocks, which is a good start. I particularly like the breakout in relative strength and the full stochastic turning up while staying above 20. In general, that is a bull market trait. The price consolidating sideways after such a big thrust up in early 2019 is pretty normal. It seems more likely that this consolidation will lead to a move higher, rather than lower. While the weekly volume does not have any unique signals on it, it does not look problematic. Lastly, the momentum shown on the PPO is nice and high. 

With the tight sideways channel, investors can try to buy near the lower part of the channel or on a breakout. The stop for me would go just under the consolidation at $35, with position size being adjusted accordingly.

Good trading,

Greg Schnell, CMT, MFTA
Senior Technical Analyst,
Author, Stock Charts For Dummies

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Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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