Today, we’re going to do a quick analysis on eBay. The stock is down about 7% after earnings, and I’ll walk you through the charts. Just a reminder, this is my opinion and not a recommendation. Be sure to check out our Discord channel for more charts and technical analysis. You can also visit TradersFly.com for options-related classes and courses—link in the description.
eBay’s Earnings and Market Impact
eBay’s earnings report actually beat estimates. The expected EPS was 0.868, and the actual was 1.05—a solid result. So why is the stock down? Earnings are often a guessing game. Sometimes, factors like a weak market, negative conference call remarks, or forecast concerns can overshadow good earnings, and eBay’s drop seems to reflect broader market sentiment.
Technical Analysis
Looking at the charts, eBay has been trending lower since late October, with a decline after an initial spike. Now, we’re at a critical support level near $50. The stock is hovering around $49.54, breaking down through support, but there’s a chance it could snap back up, like it has in the past.
Support levels aren’t exact; they’re more like ranges. If you’re considering $50 as support, you might want to look between $48 and $51. Keep an eye on a second or third day of follow-through after the breakdown—this is where it could get more concerning.
Key Levels to Watch
- $45 Level: A significant support level from 2020.
- $42.50 Range: Another key area where the stock previously bounced or rejected.
The stock is currently at $49, and a further pullback to these levels isn’t out of the question. In volatile markets, it’s not uncommon for stocks to drop another 10–16%. eBay could follow this pattern, especially considering today’s broader market drop of 3%.
Market Volatility
In times of heightened volatility, stocks like eBay can move quickly. Watch for the $40 level, and also pay attention to the SPY—if the broader market holds support, it could give eBay a chance to recover. But if the market continues to sell off, eBay is likely to drop along with it.
Basing Patterns
Right now, eBay has been trending down, but there are signs of basing patterns, which can signal potential reversals. However, without a clear base forming, any upward move could be weak. A healthier setup would involve more basing before a strong move upward. Keep an eye on whether eBay forms a base and then follows through with a breakout.
Final Thoughts
The current market energy around eBay is negative, and it may continue to trend lower in the near term. I’d be cautious about buying right now, especially with the market still weak. Watch for a turnaround in the SPY and eBay’s charts before making any decisions.
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