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STOCKS


Auction Fever for eBay

08/14/01 12:10:04 PM
by Austin Passamonte

Can eBay continue its stellar year-to-date performance?

Security:   EBAY
Position:   N/A

Venerable auction house eBay (EBAY) has been a stellar performer within the battered Internet Sector (INX) this year, up 82% year to date with expected earnings and growth expected to top 42 to 60 percent respectively. But is that enough to prop up and support a lofty 133 PE ratio for this year's performance?

Fundamentals merely offer clues while technical analysis measures actual underlying strength or lack thereof. Which is it for EBAY?

Figure 1: Looking at EBAY from two different time frames - monthly (left chart) and weekly (right chart) - helps to confirm possible future moves.
Graphic provided by: Quote.com.
Graphic provided by: QCharts.
 
The monthly chart (left) shows a Fibonacci retracement from historical low to high as price action currently trades right near 50% of that span. Failure to penetrate resistance at this level could send prices back to test next support near $51, and stochastic values suggest the next significant move may very well be down on a bearish reversal as well.

Weekly chart (right) evidence points to a slightly bearish wedge that spans from $70 to $60 for a $10 difference. Should price action break below the $60 level our next logical assumption would be a target $10 lower from there or near the $50 area. Stochastic values remain in decline on the weekly chart measure as well.

How long will the current auction on EBAY shares last? No one can say for sure, but the following bids may indeed be lower than higher in the weeks or months ahead!



Austin Passamonte

Austin is a private trader who trades emini stock index futures intraday. He currently trades various futures markets from home in addition to managing a trader's educational forum

Title: Individual Trader
Company: CoiledMarkets.com
Address: PO Box 633
Naples, NY 14512
Website: coiledmarkets.com/blog
E-mail address: austinp44@yahoo.com

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