eBay Inc. (NASDAQ: EBAY) has been trading on a recovery mode since March 14th, after hitting support slightly above the low of February 24th, at 49.50. On March 18th, the stock emerged above the downside line drawn from the high of October 22nd, while yesterday, it broke the key barrier of 56.40, thereby confirming a short-term trend reversal, in our view.
We believe that the break above 56.40 may pave opened the path towards the 60.60 zone, which provided strong resistance between February 1st and 15th, and if market participants are strong enough to overcome it this time around, we are likely to experience a test near 63.15, near the inside swing low of December 20th. Another break, above 63.15, could carry larger bullish implications, perhaps setting the stage for extensions towards the 68.10 zone, marked by the low of October 4th, and the peak of January 6th, or towards the 70.45 barrier, defined as a resistance by the inside swing low of October 28th.
Taking a look at our daily oscillators, we that the RSI runs above 50 and points up, while the MACD, although fractionally negative, lies above its trigger line and appears ready to obtain a positive sign soon. Both indicators suggest that the stock has started to gather, or is about to start gathering, upside speed, which enhances our view for further advances in the near term.
In order to discard the bullish case, we would like to see a slide back below 49.50. This could confirm the rate’s return back below the downside line taken from the high of October 22nd, and will also confirm a forthcoming lower low. Market participants may then allow declines towards the 45.40 zone, marked by the low of November 10th, 2020, the break of which could aim for the 42.20 area, marked by the low of May 5th, 2020. If there no byers to be found, even at 42.20, then we may see the fall extending towards the low of April 30th, 2020, at 37.50.
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