Recent Dip Providing Buying Opportunity On Ebay

Breaking eBay down using all three analysis styles, I would have to say the outlook for the stock is great. The fundamentals are solid with the profitability measurements and the earnings growth being particularly strong. The valuation measurements are really low at this time and that presents a strong fundamental picture.

The chart shows the stock is trending higher over the long term and the recent decline has the stock trading just above support from the trend line I mentioned. The OB/OS indicators are down to levels where we have seen reversals in the past year and that could help as well.

The sentiment being as pessimistic as it is, well that’s yet another positive for the stock. All of those analysts that are skeptical of eBay can switch to the bullish camp and that would help push the stock higher. The higher-than-average short interest ratio can also help. If the stock rallies, it could force short sellers to cover their positions.

I can see eBay making its next move higher over the coming weeks and it should challenge the $65 level again soon. A break above that double-top level could cause a breakout for the stock and we could easily see it trading up near the $75 area by the end of the year.

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