Why I’m Looking At The EBAY Monthly Chart

  • March 31, 2003
  • Derrick Hobbs


I’m not speaking of intraday time frames. I’m
not even looking at a daily or weekly chart of eBay. I want to discuss the
MONTHLY chart of this Internet survivor. This
monthly chart has set up for an excellent opportunity. And that opportunity may
present itself long or short. Confused? Check this out….

Scenario 1: The
Bear

  1. A Bearish Gartley pattern has
    completed on the monthly chart.

  2. Fibonacci price resistance
    from 85 — 91 has put a cap on price.

  3. The objective on this trade
    would be the top of the Fibonacci price support zone coming in around $66 to
    $67. Yes…I know that’s almost $20 lower than current levels. But that’s only a
    hiccup on this higher time frame chart.

  4. My stop on this trade would
    be just above 91.38.


 Scenario
2: The Bull

  1. A bearish pattern has just
    completed against resistance.

  2. The next resistance zone does
    not occur until $106. This leaves almost $15 of “Air Pocket” opportunity on
    the long side if (EBAY) pushes up through the resistance and breaks up our
    bearish pattern.

  3. I would go long on a trade
    above the top of this first resistance zone around 91.50.

Monday
Quiz

In the options world, one of the buzzwords is
“Volatility.” Specifically we look at “Statistical Volatility” and “Implied
Volatility.” EBAY’s volatility readings are very interesting. EBAY’s Statistical
Volatility over the last three years has been right around 77%.  Within 2%, tell
me what the Statistical Volatility is today. I’ll give you a hint, it is an
all-time low for this stock.

There’s a special prize for the winner…to be announced in the next column.

Have a great night.

Derrik

P.S. IU is gone, Notre Dame is out, and the dark horse Butler Bulldogs are
history. Tough year for an Indiana boy in this year’s March Madness. Time to
jump ship….Go Syracuse!