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EBAY - $42.47 ** No stop **

EBAY traded sideways all week with only a little dip on the Tuesday downdraft. There was a slight uptick as the week closed suggesting it was trying to shake off the weight of the downgrade on the other net stocks. There is resistance just under $44 but a break over that level could start a strong uptrend again.

Ebay is the only net stock that will consistently continue to improve earnings long term. Their model is self perpetuating and will continue to grow and expand as they move into other countries. Ebay dropped in January when they said they were going to spend more money on expanding their business. As an investor that is what I would want them to say but the massive profit accumulated in the stock over the last year was too much for traders to risk. There was a substantial drop from which Ebay is just now beginning to recover.

Ebay split 2:1 on the 17th of February and there was very little post split depression. I believe the retail traders picked up the slack and were happy to buy Ebay at $42 rather than the $100+ from early January.

Buy 2006 $45 LEAP Call YRL-AI currently $5.00
Buy 2007 $45 LEAP Call OYI-AI currently $8.50

Insurance put:
Buy APRIL $40 Put XBA-PH currently $1.25

Entry $42.24 (02/28)


 

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