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.