Online payment system company PayPal (PYPL) is scheduled to report their latest earnings figures after the close of trading Tuesday. Let's check out the charts this morning to see how traders might be positioned.
We last reviewed the charts of PYPL on December 1 and wrote that "PYPL has been 'trashed' pretty good so some bargain hunters and buy-the-dip players may find PYPL temporarily attractive. A bounce is always possible but that is not my style of trading. Avoid the long side until a new base develops." We included a weekly Point and Figure chart with a $156 downside price target which was reached. 
In this daily bar chart of PYPL, below, we can see that prices put in a high in July and tumbled lower into January. Prices were cut in half and the slopes of both the 50-day simple moving average line and the 200-day line are negative. Trading volume has been heavy since late October as some traders voted with their feet.
The On-Balance-Volume (OBV) line has been in a decline since October and tells us that sellers of PYPL have been more aggressive than buyers. The 12-day price momentum study in the bottom panel of the chart shows higher lows from November to January even though prices made lower lows in that time frame. This is a bullish divergence and can foreshadow a bounce or rally as the pace of the decline has slowed.
In this weekly Japanese candlestick chart of PYPL, below, we see a mixed chart. Prices are in a downtrend below the declining 40-week moving average line. The past three candles represent a potential bottom reversal pattern.
The weekly OBV line is weak while the MACD oscillator is narrowing towards a possible crossover and cover shorts buy signal.
In this daily Point and Figure chart of PYPL, below, we can see a potential upside price target of $202.
In this weekly Point and Figure chart of PYPL, below, we can see that prices reached and exceeded a bearish target of $211.
Bottom line strategy: I have no special knowledge of what PYPL will report for their quarterly numbers but the current technical setup suggests that prices are washed out on the downside and a rebound rally could unfold. Traders comfortable with buying ahead of an earnings release could go long PYPL here if they can risk to $156.
