The results of Internet retailer eBay, based in California, were unveiled yesterday.
Over the past week, Ebay’s stock price has come under strong pressure, falling more than 11% since the launch of Amazon’s disappointing results on July 29, which had a negative effect. negative in other e-commerce actions.
In April, eBay warned that it expected a slowdown in its business as vaccination programs progressed, businesses reopened and social restrictions ended.
Analysts had reason to pay attention to the company’s results after the consolidation process the company is going through, focusing on its core business and detaching itself from other business initiatives such as:
- The sale of StubHub, a secondary market for sports, music and live event tickets, for more than $ 4 billion in 2019.
- The sale of most of its operations in South Korea for about 3 billion dollars.
The strategy used by eBay CEO Jamie Iannone to curb declining revenue has been to try to increase revenue generation through advertising and online payment commissions.
The end result this quarter has been a bit paradoxical.
Despite revenue of $ 2.678 billion, 10% less than expected, thanks to reduced costs, earnings per share (EPS) increased to $ 0.99 from $ 0.96. analysts.
Source: Admirals MetaTrader 5, EBAY Daily – Data range: March 10, 2020 to August 12, 2021, held August 12, 2021 at 10:00 am CET. Past performance is not a reliable indicator of future results.
The chart above shows the evolution of eBay’s stock price since March 10, 2020 on a daily basis.
The chart shows how, since mid-November 2020, Ebay’s stock price has moved to a bullish side within a bullish channel about $ 14 wide.
Traders have respected this figure, using the RSI indicator to make a profit and, in the upward cycles, using the exponential moving average of ten periods (orange) to re-enter the market.
In recent days, the price of Ebay shares touched the resistance of this bullish channel and the RSI indicator entered the overbought zone, which traders interpreted as signals to collect profits and return to enter the market at the exponential moving average of 100 periods (red).
It would be interesting to see the behavior of the market during the first hours of trading today, as there could be strong fluctuations in the stock price of eBay. The improvement in EPS could be used as a price increase in a market that had already discounted falling revenues, causing stocks to rise backwards towards channel resistance.
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