When I look at longer-term trading opportunities, I typically step back and view the weekly charts, which differs from my typical review of daily charts. There are times, however, that the bigger picture shows opportunities that you cannot see on the daily chart. Let me show you two charts of PayPal -- first the daily chart, then the weekly:
PYPL (daily):
One major positive here, in my opinion, is the break above the 20-day EMA, a necessary first step to starting the next uptrend. I also like the increasing volume to accompany it. Finally, PYPL is bouncing off key relative support vs. its computer services peers ($DJUSDV). But it's the longer-term picture that has me most excited from a long perspective, as I see a bullish continuation pattern AND a 50-week SMA test.
PYPL (weekly):
This is a classic A-B-C-D-E bullish ascending triangle continuation pattern that's missing only the "E" of the breakout. But Point D is the best reward-to-risk entry, as a breakdown beneath recent price will help to mitigate risk, while an eventual upside breakout would suggest a price target of roughly 405.
If you're a fan of technical analysis, charting, and all that comes with it, please join me for ChartFest 2021, which will be held tomorrow, Saturday, October 16th, at 11:00am ET. David Keller, Chief Market Strategist at StockCharts.com and host of StockCharts TV's The Final Bar, and Grayson Roze, Vice President of Operations at StockCharts.com, will be joining me as we provide tons of charts to illustrate our routines and how we use the robust StockCharts.com platform to make more informed investing and trading decisions. To register for the event, which is FREE, and for more information, CLICK HERE.
I hope to see you tomorrow and....
Happy trading!
Tom Bowley, Chief Market Strategist, EarningsBeats.com
