Is PayPal's Stock Chart Showing It's In Trouble?

PayPal Holdings Inc PYPL shares are trading higher Thursday, as are those of several technology companies amid a drop in bond yields, which has lifted growth stock valuations.

PayPal was up 3.94% at $266.45 Thursday at market close.

PayPal Daily Chart Analysis

• The stock looks to have fallen out of the bottom of what technical traders call an ascending triangle pattern.
• The $310 price level has held as resistance in the past and may continue to in the future. The higher low trendline was somewhere the stock has always been able to find support and needs to cross back above it, or it may turn into resistance.
• The stock trades below the 50-day moving average (green) but above the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
• The 50-day moving average may hold as an area of resistance in the future, while the 200-day moving average could hold as support.
• The Relative Strength Index (RSI) has been climbing the past couple of weeks and now sits at 49. This shows that the stock is seeing an increased amount of buyers and now the buying pressure almost equals the amount of selling pressure in the stock.

What’s Next For PayPal?

Bullish traders are looking to see the stock push back into the ascending triangle pattern and be able to hold above the higher low trendline. This could let the stock resume the pattern it is trading in. Bulls would then like to see the stock break above the resistance and push higher.

Bearish traders are looking to see the stock hold the higher low trendline as resistance and begin to fall lower. If the stock could drop below the 200-day moving average, it may signal bears are really starting to take control of the stock.

Photo: Courtesy of PayPal