Some comments on eBay (EBAY) and Netflix (NFLX)…. (October 16, 2014)
I want to look at eBay ( NASDAQ:EBAY ). This is like a historical event because I never look at eBay ( NASDAQ:EBAY ); this is why. This kind of stuff is just boring as all get out to me, during a bull market. When other stocks are just going up I tend to make money; I’m definitely smarter, or I’m more smarter when I’m long stocks that are just trading in higher highs and higher lows, than a stock that has obviously channeling between $57.00 and $49.50. I don’t even know why you would want to own this, literally at all, during this entire period.
If I’m talking to you and you’ve owned it for all the time, I’m sure you had a good reason. Look, right about here, I mean by now, after a couple of quarters, are you really tracking this thing, do you really see what’s happening, why do you own this, for the big dividend? Oh yeah that’s right, they don’t pay one. This stock has been going nowhere for all this time, a little fake out here to get people in, everybody rushing to buy eBay ( NASDAQ:EBAY ) only to come back and basically do the same thing all this time.
Now this stock is down here, this is on a weekly chart, so what happens? They reported inline results, but it was basically all PayPal, you know what PayPal is, you have an account. Frankly, their core business here really stinks. The chart says so, it’s not even me, I’m never short of an opinion, but I don’t need to give you mine, I’ll give you the chart’s opinion; this thing stinks.
So what are you going to do now? Now I see Cantor Fitzgerald, you can’t make this stuff up, they had a $63.00 price target on it, but they’ve lowered their price target to $60.00. So let’s see, you were really, really wrong at 63.00, so now you’re just going to be really wrong at 60.00.
Here’s what you do; if it were me I would steer clear of this stock. If it happens, by any stoke of luck, to rally up to 50.00, I would be shorting that stock; I would short it hard because this is a lot of resistance above this 50.00. A lot of activity, a few volume spikes during this period of time, they were green ones, lot’s of buyers here, lots of buyers, and they’re all wrong.
If the stock gets up to here you’re likely to see this thing roll over, and if it does, that’s where you short it, you don’t short it now. If you’re long the stock keep a stop down below today’s intraday low of 46.34. Basically what I’m telling you on eBay ( NASDAQ:EBAY ) is, this is in a trap right now, it’s in a trading range, and you have to understand what you want to be doing is trading the extremes in that range not the middle part, there’s no money there.
By the way, watch Netflix ( NASDAQ:NFLX ), it could go either way tomorrow, but the way this thing is setting up doesn’t it kind of look like maybe it’s going to move higher? So I would say, I’m giving you a twofer here, if the stock starts trading above the upper Bollinger Band, currently it’s 363.40, I’d say maybe even above here, which is 363.25; set your alert at about 363.50.
I want to know if Netflix ( NASDAQ:NFLX ) moves up above that level. If it does, I think it’s probably worth more of a long. I know some of the guys on “Fast Money” think you should be buying it lower, that would be fine, I’d love to buy it at lower too. But if the stock goes higher, I’ll take it for a trade, it just won’t be on the fundamentals of the company, it will be on the action of the chart.
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