Tuesday, August 24, 2010

EBAY Watch

The online auction venue eBay Inc. (EBAY) has moved to bear phase on the fast stochastic after a bull run that began in mid-July.
EBAY $22.90

The fast stochastic has crossed the 80-line from overbought territory back into neutrality, the bear signal under the crossing method of analyzing the signal. The phase change came on a sharp decline, down 1.7% from Monday's close, and lackluster volume.

The macd, although still in bull phase, is in its second day of decline toward the zero line.

XRX hit a high on the three month chart on Monday before the pullback.

The chart, however, is anything but clear. Monday's high marked the peak of an uptrend since early July. That uptrend would remain in force if the price reverses above $20.53 and then move on to a higher high.

However, a longer term view shows a multi-year decline hitting a lower high in March of this year, before pulling back, and this month's high being merely a lower high in the continuing downtrend.

Even so, such moves can produce profitable short- and mid-term trades.

On the Person's chart, the price decline has stalled at the midline.

Person's Table
ppspps openupper pivotlower pivot
XRX $22.90 $20.83 jul23 $24.08 +5.2% $22.03 -3.8%

The support levels show room for further decline.

Reversal Levels
  • $23.61, +3.1%
  • $22.90 <== You are here.
  • $21.84, -4.6% (20-day moving average)
  • $21.49, -6.2%
  • $19.92, -13.0%
Bottom line: For my own account, I like EBAY as a bear play, but I would be very jackrabbity on my exit, particularly if the fast stochastic signal remains unconfirmed by the less volatile technicals.  

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
  • psar - Parabolic Stop and Reverse
  • adx - Average Directional Index
  • pps - Person's Proprietary Signal
  • ma20 - 20-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic
About the glance: The colors indicate the state of each signal.
  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.
  • sto zone: green for bull phase, red for bear phase.

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