EBay Downgraded When It's in an Uptrend

 | Jul 17, 2017 | 2:25 PM EDT
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EBay (EBAY) was just downgraded by TheStreet's quantitative service. I find this new development interesting in that when I look at a chart of EBAY I see it is still in an uptrend (see the charts below). It would be easy to just brush off or ignore information that doesn't fit the chart picture, but that is not being objective or humble, as technical analysis is not a perfect approach.

Keeping an open mind, let's review the latest charts and indicators for EBAY.

In this daily bar chart of EBAY, above, we can see prices are above the rising 50-day and 200-day moving average lines. The daily On-Balance-Volume (OBV) line has been rising since January, which signals more aggressive buying and confirms the price advance. The MACD oscillator just turned up to a fresh go-long signal.

In this weekly chart of EBAY, above, we can see prices are above the rising 40-week moving average line. The weekly OBV line has been positive since last June, but the line has stalled the past three months. The MACD oscillator is in positive territory but shows little trend strength.

Bottom line: A quantitative downgrade when a stock is in an uptrend -- interesting problem, but the solution is simple. EBAY is in an uptrend unless it breaks the nearby lows around $34. The solution, I believe, is to stay long and raise your sell-stop protection.

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