Stock Trading Predictions & Technical Analysis: EBAY

Monday, November 30, 2009

EBAY - Crosses over its 50 day MA

EBAY - BUY SIGNAL - SAFE BUY ZONE

Today EBAY made a sharp move up while crossing sharply over its 50 day MA, giving us a BUY SIGNAL. However EBAY now stands just below its resistance level of around $24.50. A move above $24.50-$24.75 could send EBAY as high as $25.50 before meeting some more resistance. A move above $25.50 would give us a STRONG BUY SIGNAL as EBAY would be trading over its 52 week high and therefore have little resistance preventing it from moving much higher. If EBAY starts pulling back tomorrow, it may simply continue to trend up along its up trending channel which currently is between $23.25 and $24.75. However with this BUY SIGNAL I wouldn't expect EBAY to fall lower than at its 50 day MA around $23.75. EBAY is now also in a SAFE BUY ZONE at $24.50. Its current support level stands at its 50 day MA around $23.75. So taking a long position at $24.50 with stop loss order below the 50 day MA of around $23.50 would have you risk only -4.08% in the event of a reversal, thus giving us a SELL SIGNAL. If you believe that EBAY may just continue to trend up along its channel you could increase your stop loss to around let's say $23.15 which would still have you risk only about -5.51%. This is the advantage of taking long position into SAFE BUY ZONES since you don't need to see your stock go too low and take on a big loss to get a clear SELL SIGNAL. EBAY is relatively a slow moving stock with several intra-day moves of just under +/- 1%, and that is why today's gain of around +5.60% is very significant.

2 comments:

DBDecember 2, 2009 at 7:22 PM
Yoel,

Apple Inc seems to be trending down since Nov 16 2009, is this beginning of a down trend or just a minor correction. What would next support levels and resistance levels?

Thanks,
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YoelDecember 2, 2009 at 9:00 PM
Right now, this just looks to be a minor correction. However, AAPL is now standing just above its 50 day MA, so a sharp move below $195.00 would give us a STRONG SELL SIGNAL. AAPL has managed to stay above its 50 day MA since the month of March. If a bounce back up occurs tomorrow, this would be a good buying opportunity as it will reaffirm once again this strong support level.
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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.