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by Charalambos Pissouros

eBay Moves Above a Downtrend Line

After bottoming on the 26th of December, eBay Inc. (NASDAQ: EBAY) has been on an upside trajectory, and yesterday it managed to close above the downtrend line drawn from the high of the 1st of February last year. Although this suggests it is time to abandon the bearish case, we would like to see a clear and decisive close above 30.80 before we get more confident on the potential upside reversal.

Such a break could confirm the break above the downtrend line and may initially pave the way towards the 32.40 zone, defined by the highs of the 16th and 17th of October. Another move above those peaks could encourage more buyers to join the action, who may drive the share price up to the 34.75 zone, a resistance marked by the peak of the 9th of October.

Shifting attention to our short-term oscillators, we see that the RSI lies above 50 and looks to be heading towards 70, while the MACD stands above both its zero and trigger lines, pointing up as well. These indicators suggest that the stock has the necessary momentum to overcome the 30.80 hurdle and drift a bit higher.

On the downside, we would like to see a dip back below 27.75 before we start leaning towards the bearish side again. This may signal that the current move above the downtrend line was a false break and could open the path for the 26.00 zone, near the low of the 26th of December. Another break below that trough would confirm a forthcoming lower low on the daily chart and may allow the price to test the psychological barrier of 25.00.

ebay stock share daily chart technical analysis


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