eBay, Inc - EBAY - close 20.71 change -0.24 stop 23.10
eBay Inc. (eBay) connects buyers and sellers globally on a daily basis through eBay, an online marketplace located at www.ebay.com, and PayPal, which enables individuals and businesses to send and receive online payments through www.paypal.com. The Company has two business segments: Marketplaces and Payments. On November 19, 2009, the Company sold its interest in Skype Luxembourg Holdings S.a.r.l., Skype Inc. and Sonorit Holdings, A.S. (collectively with their respective subsidiaries, the Skype Companies) to Springboard Group S.a.r.l. Prior to the sale, the Company operated in three segments. Its Communications segment, which consisted of Skype, enabled Internet communications between Skype users and provided connectivity to traditional fixed-line and mobile telephones. Following the completion of the sale of Skype, the Company operates through two business segments.
Target(s): 18.82, 18.40, 17.75
Key Support/Resistance Areas: 22.90, 21.50, 20.43, 20.30, 18.90, 18.39
Time Frame: 1 to 2 weeks
Why We Like It:
EBAY is hanging on to a key support level in the $20.30 to $20.50 area which I think will break in the coming days. If EBAY breaks this support there is not much below to hold it up until the $18.80 area which is below our first target of $18.82. The stock is below its 20-day and 50-day SMA's, both of which are declining, as well as its 20-week and 50-week SMA's (shown on the weekly chart below). I suggest we open short positions if EBAY trades to $20.27 which would be a break of support. I also suggest we use a trigger to short EBAY if it trades up to $21.30 which is just below a prior support area dating back to November and February lows. Our initial stop is $23.10 which is above the stock's recent highs and the 20-day and 50-day SMA's.
Suggested Position: Short EBAY stock if it trades to $21.30 or $20.27, whichever occurs first
Option Traders: Buy August $25.00 PUTS, current ask $1.40
Annotated Weekly Chart:
Entry on June xx
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 19.8 million
Listed on June 28, 2010