THIS IS NOT A TIP. I AM NOT A TIPSTER. PLEASE DO YOUR OWN RESEARCH. PLEASE READ THE DISCLAIMER ON THE HOME PAGE OF MY WEBSITES. 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. The Fundamental story and my Investment here is really based on the ePayments and eBanking theme - although EBAY is reasonably rated for a quality Internet Player and is well known for its Auction Site. EBAY owns PayPal and that is what really interests me - it is intending to spin it out in an IPO of its own in early 2015. This event could help kick the shares much higher, but for the meantime I think they are stuck in a Sideways Range as I will explore 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. On the Chart below, you can see that the RSI is up at the Top of its Range - time to sell obviously. On the Chart below, I have marked with the Blue Arrow a Doji Candle that is a good indication that the Price will most likely fall from here - remember that Candles can give the earliest warning that a Change in Trend is coming. There, I told you it would be short - I don’t think there is a great need to add any more. Feel free to ask questions via Email or in the ‘Comments’ Section below if there is something you feel I have not addressed.
Regards, wd
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