eBay outpaced the broader S&P 500 Index in recent months
Online retailer eBay Inc (NASDAQ:EBAY) saw its stock bounce from the put-heavy $36 level recently thanks to strong earnings, sending the shares gapping back above the 40-day moving average, a trendline that previously acted as resistance in 2018. Despite a strong run higher in recent months, with EBAY roughly doubling the performance of the broader S&P 500 Index, there’s reason to believe the equity has more room to run.
To be sure, there’s a lot of bearish sentiment hanging around eBay. Short interest has basically risen in lockstep with the stock since October, and EBAY recently popped up on an internal study suggesting shorts are at a huge loss. Should short covering occur, the security could spike higher.
There’s plenty of potential for bullish analyst notes, too. Half the brokerages in coverage still have “hold” ratings in place, so upgrades could one day spark an EBAY stock rally.
Elsewhere, the shares have a Schaeffer’s Volatility Index (SVI) of 22% that ranks in the 8th annual percentile – hinting at unusually low volatility expectations.
Subscribers to Schaeffer's Weekend Trader options recommendation service received this EBAY commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.