• Chart of the Day: eBay Inc. (EBAY)

    by  • September 19, 2013 2:16 pm • Charts to Watch, Quick Hits, Tony Venosa's Chart of the Day • 0 Comments

    Today’s chart is of eBay Inc. (EBAY) which provides online platforms, tools, and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally.

    Ticker:  eBay Inc. (EBAY)

    What I Am Looking At:

    • Up over 6 percent year-to-date, underperforming its peers in the Internet Index which is strongly outperforming, up over 29 percent year-to-date
    • Choppy chart action depicted in the daily chart above
    • 0 percent year-to-date level has acted as support on 4 separate occasions this year
    • Big downside gap followed cautious third quarter guidance on July 18th, this gap zone may act as potential resistance
    • RSI (Relative Strength Index) indicating overbought condition
    • Peak call open interest for the September/October series is situated at the 55-strike, which may add to the gap resistance case
    • The 10-day buy-to-open call/put ratio stands at a lofty 3.22 indicating strong optimism among option traders despite the shares’ underperformance
    • Short interest is relatively low as only 1.3 percent of the float is sold short
    • Nearly 2 days for shorts to cover
    • 22 out of 28 analysts rate the shares a “buy” or better, could see downgrades in the near future

     

    Conclusion:  I could see the $55 level as a short-term top in shares with a target back down to the 0% YTD level and possibly the round-number $50 level.

    About

    Tony Venosa, CMT is a Senior Options Strategist and works on the trading desk at Schaeffer’s Investment Research. He joined Schaeffer’s in 2010. He has worked in the finance industry for over 15 years. He began his career as a trading assistant in Chicago on the floor of the Chicago Mercantile Exchange. He later moved upstairs and worked as a commodities broker on both the retail and hedging side. He left the brokerage industry to begin his trading career as a proprietary equities trader at a Chicago firm. In 2000, Tony moved backed to his hometown and continued trading his personal account. He later went on to earn his Chartered Market Technician designation. He earned a B.S. in Finance from Miami University. Tony’s main focus is short-term directional option trading.

    http://www.schaeffersresearch.com/

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