From around January of 2017, the PayPal Holdings Inc stock (NASDAQ: PYPL) had been on a steep upmove, only slowing down a bit in 2018, where it seemed that the stock might reverse to the downside. But it never happened, as, probably, investors decided that the stock is still quite attractive even at those levels. The price jumped again and travelled in the northern direction to hit its all-time high at 121.44. PYPL managed to reach that high this July, while trading above a medium-term upside support line taken from the low of December 24th. But the share price came down last week to test the above-mentioned upside line. Yesterday, after the US opening bell, the stock opened with a downside gap below that upside line and below last week’s low at 113.07, which, most likely, the short-term speculators saw as a warning signal. PYPL drifted further down and closed the trading session well in the red. This is why we will remain somewhat bearish and target slightly lower areas, at least in the short run.
A further slide might bring the price to the 109.44 zone, which previously acted as a good support on June 5th. There is a chance we could see the PYPL stalling around that area, or even retracing back up a bit. But if the stock struggles to move above the aforementioned upside line, this could mean a change in the medium-term trend, leading to another possible slide in the price. If this time the 109.44 hurdle fails to keep the stock up, its break may open the door to the 103.95 level, marked by the lowest point of June. Slightly lower, PYPL could test its 200-day EMA, which may support the stock from moving further down. On a bigger scale, the move lower could just be seen as larger correction before another push higher in the long run, as the price would still be above a long-term tentative upside line drawn from the low of April 13th, 2017.
Our oscillators, the RSI and the MACD, are in support of the above-discussed short-term idea. The RSI is now below 50 and points to the downside. The MACD, after topping in the second half of July, has moved lower and is now very close to zero. At the same time, the indicator continues to point lower by sitting below its trigger line.
Alternatively, if the price suddenly gets pushed back above the aforementioned upside support line and rises above the 117.44 barrier, marked by the high of July 25th, this might interest some new investors to join in. This is when we will target the all-time high again, at 121.44 zone, a break of which would place the stock into an uncharted territory, trying to find a new strong resistance level.
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