NASDAQ:EBAY may be ready to breakout.

A possible breakout setup was detected on Ebay Inc (NASDAQ:EBAY) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NASDAQ:EBAY.

Zooming in on the technicals.

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

Taking everything into account, EBAY scores 8 out of 10 in our technical rating. Although EBAY is only a medium performer in the overall market, the technical picture looks good in both the medium and short term time frames.

• Both the short term and long term trends are positive. This is a very positive sign.
• EBAY is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so EBAY is lagging the market slightly.
• In the last month EBAY has a been trading in the 63.36 - 70.77 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• When compared to the yearly performance of all other stocks, EBAY outperforms 63% of them, which is more or less in line with the market.
• EBAY is part of the Internet & Direct Marketing Retail industry. There are 71 other stocks in this industry, EBAY did better than 61% of them.

Why is NASDAQ:EBAY a setup?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:EBAY scores a 8 out of 10:

Besides having an excellent technical rating, EBAY also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 70.08. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 68.31, a stop order could be placed below this zone. We notice that large players showed an interest for EBAY in the last couple of days, which is a good sign.

How to trade NASDAQ:EBAY?

For a potential trade one would typically wait until the stock breaks out of the consolidation zone to enter the stock and it could be sold again for a loss when it would fall back below the zone.

Of course, there are many ways to trade or not trade NASDAQ:EBAY and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

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