After forming a double bottom in the end of 2018, the eBay Inc stock (NASDAQ: EBAY) moved sharply to the upside and continued to trade above a medium-term upside support line, drawn from the low of January 24th. But that was up until October 2nd, when the price closed below that line. In addition to that, from around mid-June, the stock was also trading inside a range, roughly between 38.50 and 42.00 levels. But in the beginning of October, EBAY also exited that range through the lower bound of it. Everything what was mentioned above paints a negative picture, hence why we will aim for slightly lower areas, at least in the short run.
Given that the stock got held by the 200-day EMA yesterday, we will wait for a clear daily close below it first, before examining further declines. If that happens, the next potential support area might be seen at the 36.70 hurdle, marked near the inside swing highs of May 28th and 30th. The price may stall around there, or even correct back up a bit, but if the stock is still struggling to find new buyers, it might reverse south again. EBAY could once again test the 36.70 obstacle, a break of which might set the stage for a further slide towards the 35.40 level, which acted as a strong support on March 8th, April 18th and June 3rd.
Our oscillators, the RSI and the MACD, are also somewhat in support of the above-discussed scenario. The RSI is below 50 and points to the downside. The MACD is below zero and its trigger line, and also points lower.
On the upside, if the price suddenly reverses back up, breaks above the aforementioned upside line and travels above the 39.47 barrier, marked by the high of October 1st, this could attract more buyers into the game and we may see the stock moving higher. We will then aim for the 40.85 obstacle, a break of which may send EBAY to the 42.00 level, which is the upper bound of the previously-mentioned range, and also marks the highs of July 18th and August 1st.
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