Stock of the day: PayPal
23 December 2024
In today's Stock of the Day, let's delve into PayPal, focusing on the weekly chart. The technical picture is far from encouraging, as the price has formed a classic Evening Star candlestick pattern, marked by a sequence of three candles: a bullish candle, followed by a gap-up indecision candle, and finally a bearish candle with lower highs and lower lows. This bearish reversal pattern, highlighted with a yellow rectangle, indicates growing selling pressure.
However, there is an intriguing twist. At the end of the week, indices experienced a bullish reversal, offering a glimmer of hope for PayPal. This reversal is evident in the weekly chart, where the lower wick of the last candle demonstrates buying interest around a critical confluence of supports: a red horizontal support and a black uptrend line.
As long as the price holds above these two key supports, the bearish sentiment remains on hold, and a sell signal is not yet confirmed. However, if the price closes a day below these supports, it would confirm a strong sell signal, with a significant downside likely to follow.
Key Points to Watch:
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The red horizontal support and black uptrend line are pivotal levels.
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A daily close below these supports will invalidate any bullish hopes and trigger a sell signal.
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For now, the situation hinges on whether buyers can maintain control above these critical levels.