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PayPal Fades Despite Strong Q1

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PayPal got turned away at its 50-day moving average even though earnings and sales growth accelerated sharply from Q4.

Video Transcript


- And you mentioned the nice earnings report for PayPal but the chart action doesn't look as nice. PayPal hitting a little bit of resistance around its 50 day line. So even though we did end up seeing some strong volume on today's move Ken. It doesn't really feel like PayPal is in a great position at this point from a technical perspective.

- No, it's not I mean it was in the news today. And I don't think that this stock's run is over it is probably just going to base for a little while longer here. You can see it did have some problems at its 50 day moving average actually ended with with a decent gain today. You can see that earnings and sales growth accelerated nicely from the fourth quarter. And you know they're talking about cryptocurrency being a big growth driver. And they're going to be announcing a next generation digital wallet. So PayPal is constantly innovating I like the estimates for this company not only for this year but in 2022 as well.

- Yeah.

- You know we're talking a very very large company here. So this is still a compelling growth story. So you know this is probably going to base for a little while longer if we go to the weekly chart will notice that this is caveat emptor this is a later stage base you can see you know a breakout over the 120 level several months ago Yeah right there was sort of your first stage breakout. And then you had a second stage breakout right there and here we are forming a third stage base. So third stage is considered later stage it's not late stage. Like I said, I still think Paypal's got a good runway for for growth and stock appreciation. But it's probably going to base for a little while longer here.

- Yeah, and it doesn't look like the stock is broken by any means here it's hanging around that 10 week line. And with PayPal being a long term leader we do like buying these stocks on pullbacks. So maybe if it can get a little bounce off of that level perhaps it might be an opportunity.

- Yeah, absolutely with a little maybe a tight stop just below the 50 day moving average something like that but you're exactly right. It's not a broken stock by any means that the 10 week line has started to trend a little bit lower. But it's still holding comfortably above the 40 week moving average. And we'll see if it can ultimately find support here and eventually start forming the right side of of a possible base.

- That's right. Well it's hard to find a company with a stronger fundamental track record than PayPal. So we'll have to see if the chart action can shape up.

- Yeah, they've been going aggressively six months into cryptocurrency. So that was you know alluded to by the company that cryptocurrency is going to be a growth growth driver. So that could could spur growth.

- Interesting story there.