Charts Say eBay's Decline Is in the Ninth Inning

Let's check out the technical condition of the stock.

Shares of eBay (EBAY) have made a decline from October to May but a sell-side firm rated EBAY a "new market perform" Tuesday. The company was one of the first companies to create and market a website to match buyers and sellers of goods and services. Let's check out the technical condition of the stock to see if it can be one of the first stocks to make a recovery. 

In the daily bar chart of EBAY, below, we can see that the shares made a brief push up above $80 in October before turning lower. Prices have not been cut in half but we are close. EBAY trades below the declining 50-day moving average line and below the bearish 200-day moving average line.

The On-Balance-Volume (OBV) line declined and made a low in March that has not been breached even though prices have continued lower into May. This is a bullish divergence. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line but the oscillator is not making a big decline below the December or January low and the oscillator has been narrowing.  

 

 

In the weekly Japanese candlestick chart of EBAY, below, we can see a mixed picture. Prices are in a downtrend and trade below the declining 40-week moving average line. The two most recent candles could be a harami pattern and bottom reversal but they still need bullish confirmation this week.

 

The weekly OBV line shows weakness from September but could be steady in May. The MACD oscillator is pointed down but has done some narrowing towards a cover shorts buy signal. 

 

 

 

In this daily Point and Figure chart of EBAY, below, we can see a potential downside price target of $28. 

 

 

 

In this weekly Point and Figure chart of EBAY, below, we can see the same $28 price target. 

 

 

Bottom-line strategy: Traders could probe the long side of EBAY above $47 risking to $43.

 

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