Here’s the last post I made on PYPL 0.00%↑ , it’s a name I’ve traded around quite a bit due to familiarity.
It’s been an interesting week for PYPL 0.00%↑. Wednesday brought a pretty strong intraday reversal on volume, which was followed with a move to the upside yesterday. The call/put volume has also been strong throughout the week.
We’re at a familiar place with the name though. It’s above the AVWAP from August’s earnings related gap down (it’s also above the same from May, depicted in both of the light blue lines above). It has a gap range above of 7 points , or about 11%, which is attractive from a risk/reward perspective. And it’s approaching a flat 200 day moving average (orange).
But we’ve been here before. Look at last May’s price action and you can see similar circumstances in the build up to Augusts earnings release. The arrow is pointing to the rejection point, not dissimilar from where the name is today. The company reports on 2/7 and I couldn’t fault anyone for waiting out resolution of the 200 day before considering a long.
PayPal has been one of the worst stocks when measuring peak to trough, as it’s mired in an 80% drawdown from its 2021 highs, along with a valuation that’s 40% below its pre-covid levels. Fundamental issues have undoubtedly played a role, but that doesn’t matter at this point today in evaluating a trading opportunity.
