On Tuesday 23rd December 2014 I Topsliced my eBay (epic code EBAY) Spreadbet Position, banking roughly a 10% gain on the Exposure this position represented. Of course, because I was using Leverage, the return on the Deposit money tied up was probably about 200% (Deposit 5% on this stock I think).
This is just a short Blog to explain the move - I have kept the Rump of my EBAY Exposure - I don’t want to sell out totally but it seemed like a sensible Short Term Tactical move to trim it a bit - as I will address below.
I won’t go into huge detail here - just the High Level. If you look at the Chart below, you will see where the Price was in a Clear Uptrend Channel and then it moved into a Sideways Range about 2 years ago - so this is a strong Trend and will take some ‘Breaking Out’ of - although I do think it could happen eventually - maybe in 2015 but I do not think it is Breaking Out now.
All the charts shown here are from Monday 22nd Dec 2014 which is the Evening on which I was making the decision to Topslice EBAY - so these are the exact Charts I was looking at and using.
The Sideways Range is clearly from about 4800 to 5800 ($48 to $58). The Price has moved to the Top of this Range, so it seems a good time to do some Selling here and this prompted my Topslice. I am keeping a load because I believe in EBAY longer term. As I highlighted on a Flurry of Tweets earlier today, when you get a Pattern like this with a Sideways move after an Uptrend, it is normally the case that the Price Breaks Out to the Upside and we get a New Uptrend - it is a sort of ’Bull Flag’ that has developed over a long period of time. It is very rare for the Price to fall out of the Sideways Range to the Downside - it does happen, but not often. The more usual prelude to a Down Trend is a sort of ‘Rolling Top’ formation where there is more of a Curve or Arc to the Price Action rather than the clearly Horizontal Range that we have here on EBAY.