eBay Inc. (EBAY) was last reviewed in early July where I wrote that "EBAY has weakened in the past few months and looks like it can down to the $31-$30 area. Wait for a better buying opportunity in the weeks and months ahead."
EBAY continued weak into early August but it has found buying in the $34-$33 area, above the Point and Figure target in the $31-$30 area.
EBAY was upgraded today by TheStreet's quantitative service to "Buy" so a fresh look at the charts is in order today.
In this updated daily bar chart of EBAY, below, we can see the early basing action on the chart from early August. Prices have not made a new low on the early September "retest" and the 50-day moving average line is being tested. The 50-day line is pointed down but a close above the line will help as will a close above the August high.
The daily On-Balance-Volume (OBV) line has broken its decline from April and tells us that buyers of EBAY have become more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early August for a cover shorts buy signal and now this indicator is close to crossing above the zero line for an outright go long signal.
In this weekly bar chart of EBAY, below, we can see that prices are below the declining 40-week moving average line.
The weekly OBV line shows some stability and the MACD oscillator is close to a weekly cover shorts buy signal.
In this Point and Figure chart of EBAY, below, we can see some accumulation and an upside price target of $38.34.
Bottom line strategy: Traders could go long EBAY at current levels and on a close above $35. Risk a new low close below $33 looking for an initial rally to the $38-$39 area.