Key Support Decision for eBay
eBay is actually
bucking the trend of the broad market since May. It made a low at 49.25 and
is now trading in the 60.00 range. The last three days eBay has pulled back
and is within striking distance of a key Fibonacci price support zone from 58.10-59.43.
If eBay can hold above this support zone, then the immediate uptrend is in place,
as well as the symmetry of previous corrective moves. Notice how the last three
declines were between 4.7 and 5.8 points.
So, with the immediate trend, I would
like to see eBay trade down into our support zone and hold it. At that point,
I would be looking for triggers to go long. My initial stop loss could either
be the swing low made into support or a stop just below the Fibonacci zone around
58.00.
Of course, the other side of this price support decision is if eBay fails
to hold above it. If it trades down through these levels, then this new uptrend
is in jeopardy, and it would likely signal a deeper correction at the least,
and possibly a test of the May 7 low.
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