Today we’re focusing our attention on what’s happening in shares of Ebay. I think the action so far as it approaches all-time highs is extremely constructive. Let’s break it down:
The first one is a long-term monthly chart where we can see a nice tight consolidation taking place over the past year:
This is arguably one of the most healthy ways a security can act as it nears historic supply. It’s when they shoot up into those all-time highs that failures typically occur. This one is great structurally, in my opinion.
Here are are the weekly candles where I highlighted the previous consolidation back in 2011 before prices doubled. I think we can see something similar. Perhaps not a double from here, but something substantial is certainly brewing:
On a relative basis, look at this uptrend from the 2009 bottom showing $EBAY leading the S&P500 higher. What I love about this chart is the breakdown below trend that the bears could not support. From false moves come fast ones right? Well look for Ebay to continue to outperform nicely vs S&Ps:
Finally here is a closer look at the daily candles. We can see that the false breakdown in November was the catalyst necessary to finally break this thing out of its long consolidation. We find these whipsaws so frequently before breakouts that it’s just a thing of beauty:
There are two ways to look at this resistance: both horizontally and using a downtrend line from the April highs. Price this week has taken both of them out. Longs are just fine and dandy above this downtrend line. Below that things get messy and worth reevaluating the bull thesis.
I must say that I also really like the zero correlation with S&Ps in this name over the past year. Short-term we’ve seen it a bit more tied to the overall market, but longer-term it seems to trade more on it’s own. We like that.
REGISTER HERE for more information on how to receive weekly top/down analysis like this on various asset classes around the globe
Tags: $EBAY $SPY