After its rebound on the 31st of October, eBay Inc. (NASDAQ: EBAY) struggled to overcome the 30.15-dollar mark in the following days, with the bulls eventually giving up yesterday and letting the price to slide again. The stock has been in a downtrend since February, marked by a trendline drawn from the peak of the 1st of that month, and thus, as long as the price action remains of lower peaks and lower troughs below that line, we would consider the outlook to be negative.
We would expect the slide to continue and the price to challenge once again the 26.50 zone, marked by the low of the 29th of October. A clear and decisive close below that barrier would confirm a forthcoming lower low and would bring the share into territories last seen in July 2016. Our next support is the psychological zone of 25.00, which is defined by the lows of the 12th and 13th of July 2016, and is also fractionally above the inside swing peak of the 23rd of June 2016.
Shifting attention to our daily momentum indicators, we see that the RSI has turned down after it hit resistance near its 50 line, while the MACD, although above its trigger line, remains within its negative territory and shows signs of topping as well. These indicators suggest that the downtrend is about to gain some steam, supporting our view for further declines.
On the upside, even if the share rises above 30.80, we would still see a cautiously negative picture, as it could turn down again from near the crossroads of the 32.40 level and the aforementioned downtrend line. We would like to see a clear close above 32.40 before we start examining the case of a positive reversal. Such a break could initially open the path for the high of the 9th of October, at around 34.75. That said, a break above 35.60 would be then needed for the stock to experience another strong positive leg, perhaps towards the 38.30 zone, fractionally below the high of the 18th of July.
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