Ebay Inc. Stock Code EBAY.NAS
Price reached a high at $35.66 recently. This was also a former high as well as a support turned resistance point. Recent price ranges are getting smaller. This is a hint of a price consolidation and a possible end of the rally. MACD supports this view with bearish divergence formed as price reached the high at $35.66.There is a big gap resistance zone from $35.66 to $37.77. Price is likely to test this resistance zone but should not go above it. If price is unable to close this gap zone, it is likely to decline. First support is at $32.38 and the next possible target is at $31.01. We would recommend selling into the gap resistance around $36.80 for a move to $32.38
Strategy
$36.80 Short Sell
$32.38 Price Target
$37.80 Risk Management Stop
3 weeks Trade Duration
General Motors Company. Stock Code GM.NYS
Outlook
Price reached a high of $40.74 and gapped down the next day, closing a gap that was created 2 days earlier. This is an exhaustion gap and it is a hint of a top in place. This high is also just above the Fibonacci 61.8% of the decline from $44.96 to $30.50. Price should not go above $40.10 and if this gap is not closed, price is likely to go down to the next support zone at $36.26 to $35.72. This support zone is formed by the combination of gap support, Base line and previous high. MACD supports this bearish view with a bearish divergence seen when price made the high at $40.74. We think it is a good opportunity to get a short position with a small stop loss for a decline to $36.26-$35.72.
Strategy
$38.90 Short Sell
$40.10 Price Target
$35.80 Risk Management Stop
3 weeks Trade Duration
