Hello wonderful and beautiful people! How is your 2017 going so far? I’m sure you know earnings season is quickly approaching.
Some big names are coming down the pike. EBAY always has the potential to have a wild and volatile earnings season. Last earnings, EBAY had a large gap down, where EBAY continued lower about 20% after earnings. The interesting topic about that gap is, it appears as if it’s starting to fill. The first candle on 12/9/16 is the one that pierces and closes into that gap, showing its strength beginning to weaken.
You’ll notice I have the $29.41 price as a very strong support and resistance. This was the previous all time high / resistance area from back in November, 2013. This also happened to be the price that the opening candle after each of the last two earnings; opened near and battled with.
So, what now? Well, EBAY appears to have 2 nice double bottoms here recently. One on a weekly chart, from Feb to June of 2016. Then on the daily chart, you’ll see it on my image below, with the neckline being at, of course $29.41
Therefore, I’m look at this as a pre-earnings trade. I have no clue what to expect on EBAY. As long as it doesn’t gap down below $28, I would imagine it remaining more bullish than bearish.
If EBAY pulls back to $30.40, one could do a limit buy at that price, with a stop at $29.39. This could be traded with shares or options.
To keep track of this trade with myself and other traders, I invite you to check out our FREE open house this week, where the morning day trading room and afternoon swing trading room is open to the world. This is a very rare event. I would love to trade with you! Just email me at firstname.lastname@example.org and I’ll ensure you get everything you need to be in class with us.
You rock! Let me know if you have any other questions or need anything else!