Technical Trades
Technical Analysis applied to Stocks and Futures.

Further to THIS POST and THIS POST I note that EBAY is still doing the weekly 5th down. The daily fuzzy count I mentioned earlier (being in a 5th down) transitioned into subwaves, a common occurrence in wave analysis. The current fuzzy count shows that it is doing an ‘a’ up.

It’s interesting that it’s not participating in the broader market rally this morning, but really not surprising at all considering the long and short-term TA for it. I strongly caution anyone long this stock to hedge their positions by selling calls or buying protective puts. The bias is clearly down and poor earnings news this evening could send it plummeting.

Personally, I will be shorting the after-hours pop to 26.70 resistance and will use around a 4% stop . If that entry proves poor I will tighten the leash on it as appropriate and exit for breakeven. (EDIT: Exit for a push and reshorted @ $27.00 with 4% stop). I’m looking for a nice quick pop for entry followed by a near-immediate dump. If it doesn’t act like this I will be exiting the position. Why? I’m looking for something very specific and from experience this is the best setup to look for. It gives the best returns in the shortest amount of time, usually with great reward/risk ratios. I note some gaps for EBAY much lower and 4% risk to target them makes great numeric sense, much like in the below flow chart, where business strategies, decisions and actions fall within the scope of and on the foundation of good business sense. Substitute the word “trading” for “business” and you get the idea. If your trading actions make good numerical sense within your strategies, the green arrows up in your profit will follow.

I just looked at EBAY again and it’s breaking down through intraday S1 and down out of a diamond formation…not good for bulls.