Following eBay’s recent earnings report, the stock has demonstrated a decline in momentum, facing resistance at key levels. The analysis indicates a downward trend, making it suitable for establishing short positions based on volume profile and resistance zones.
The short trade plan outlines three sell orders with a structured approach. The total position size is 600 shares, with a maximum loss capped at $1,200 and a potential reward of $5,400. The targeted exit point is set at $62.02.
Traders are advised to manage risk by closing out partial profits at strategic levels while maintaining focus on the primary target.
eBay’s recent performance has shown a weakening trend, unable to sustain upward movement beyond identified resistance areas. As selling pressure increases, the market suggests lower price levels in the short term, reinforcing the case for downside exposure. With volume profile analysis confirming areas of seller dominance, the trade plan aligns with historical price behaviour.
The structure of this trade is built around three staggered short orders, ensuring an optimal entry while controlling exposure. A total of 600 shares have been allocated, distributing risk while allowing for flexibility as conditions unfold. Strict limits have been set on losses, with a predefined cap of $1,200, maintaining discipline in execution. Meanwhile, the reward scenario presents an opportunity to gain up to $5,400, adhering to a favourable risk-to-reward ratio.
Levels for partial exits act as key points to lock in gains and shield against reversals. By securing profits incrementally, exposure is managed without sacrificing the broader objective. The final profit target remains fixed at $62.02, a level informed by previous price interactions and current resistance.
In the coming sessions, it will be necessary to observe volume and order flow as price tests strategic areas. If the market responds with renewed selling, the plan remains intact. However, adverse moves would require quick adjustments, ensuring capital preservation without unnecessary hesitation.
