Earnings Play: PayPal

How to play PayPal's 2Q earnings release.

New Highs 1

On Wednesday, after market, PayPal (PYPL) is anticipated to report second quarter EPS of $0.87 compared to $0.72 a year ago on revenue of approximately $5.0B vs. $4.3B last year. The Co operates an online payment firm and its current analyst consensus rating is 37 buys, 8 holds and 1 sell, according to Bloomberg. 

Looking at a daily chart, PayPal's stock price recently dipped below its 20-day moving average which it has been using as support since breaking above it in early-April. The RSI has been fading since price gapped about 9% on May 7th, possibly showing bearish divergence. Even though PayPal's stock price dipped below its rising moving average support line, it is still managing to hold around it. Price seems to be consolidating and forming a symmetrical triangle pattern on a short-term basis after making a record high on July 9th. Price is will likely chop around inside the short-term pattern before breaking to the upside and continuing the uptrend advancing to retest and probably break out from its all time high of $184.00. However, if price falls below the lower trend line of the pattern we could see a bounce at the $164.00 support level. If price breaks the $164.00 support, it may also fall below its 50-day moving average, a bearish signal which could send price back down to its $151.00 support.       

Source: GAIN Capital, TradingView

More from Earnings

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.