PYPL pulled back to a historically bullish trendline after hitting a record high
It's been a rough stretch for tech stocks, with recent losses exacerbated by a devastating earnings reaction for Facebook (FB). However, this recent pullback has likely created some buying opportunities within the sector, and one name of potential interest to bullish traders is electronics payment processor PayPal Holdings, Inc. (NASDAQ:PYPL).
Looking at the charts, PYPL stock has been trending higher over the long term -- adding 40% in the past 12 months. More recently, the stock topped out at a record high of $92.35 on July 25, before pulling back sharply on broader headwinds.
The security is now trading within one standard deviation of its 160-day moving average after a lengthy stretch above it, which has marked attractive entry points in the past, per data from Schaeffer's Senior Quantitative Analyst Rocky White. Specifically, in the six other times this has occurred going back three years, PYPL stock has averaged a one-month gain of 2.85%, with two-thirds of those returns positive.
Plus, PayPal popped up on a list of stocks that could be potential buys after the recent tech sell-off. According to White, PYPL was ranked in the top 15% of S&P 500 Index (SPX) stocks for most of last month -- up 9.7% from its June 28 through July 25 closes. However, it was also in the bottom 15% of stocks selling off through the end of the month, shedding 9.91%. In similar scenarios, these SPX stocks averaged a next-month gain of 1%, with 56% of the returns positive.
In today's trading, PYPL stock is up 1% at $83.13, bringing its year-to-date gain to 12.9%. Most analyst remain upbeat toward PayPal stock, but there's certainly room for upgrades to draw more buyers to the table. Although 26 brokerages say the stock's a "strong buy," six still maintain a lackluster "hold" rating on the shares.