EBAY has pulled back to historical support on the charts
eBay Inc (NASDAQ:EBAY) was last seen up 1% to trade at $103.29, bouncing off last session's three-month lows thanks to a price-target hike from Citigroup to $130 from $127. Though the $120, just shy of the stock's May 20 record high of $119.31, has kept rallies in check for the past few months, now looks like a good time to bet on another shot at the ceiling.
According to Schaeffer's Senior Quantitative Analyst Rocky White, EBAY is trading within 0.75 times the 126-day moving averages' 20-day average true range (ATR), after spending at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that trendline. This setup has appeared 12 times over the last decade, after which the stock was higher one month later 75% of the time, averaging a 5.5% gain.
Analysts are leaning bearish despite the stock's 18.7% year-to-date lead, and an upgrade or two could provide tailwinds as well. Of the 31 brokerages in coverage, 19 carry a "hold" or worse rating, with 10 a "strong buy" and two a "buy."
Options are an intriguing route, per EBAY's Schaeffer's Volatility Index (SVI) of 32% sitting in the 20th percentile of its annual range.