John123
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John123 in Gainers & Losers,

eBay is down 6%. Buy a bounce or sell a rally?

eBay (EBAY) shares fell 6% on Thursday after ChannelAdvisor said eBay's same store sales came in at 1.1%, down from 3.4% in August.

According to ChannelAdvisor, eBay had September same store sales of 1.1%. That is well below the 15% forecasted by comScore. ChannelAdvisor said it is the lowest rate it has seen since February of 2011.

The research firm also found that September eBay auction same store sales were negative 31% year over year. In August they were negative 31.1%.

EBAY was down on heavy volume of 48.5 million shares. Average daily volume is 17.8 million shares.

So what to do now? Buy a bounce or sell a rally? Actually you can do both.

In the short term I think we can see some bounce.

But if we are speaking about medium term positions I would prefer to sell EBAY above $26. In global markets it will be very difficult for eBay to compete with Chinese companies Alibaba and JD where most merchants are offering free worldwide delivery. Also, on the monthly chart there is a bearish divergence. So I think uptrend will be broken.