Schaeffer's Market Observation Features eBay: EBAY.Business Editors CINCINNATI--(BUSINESS WIRE)--April 20, 2004 Today's Market Observation from Schaeffer's Investment Research features eBay (Nasdaq:EBAY). Market Observations are market-based reports that provide insight and analysis from a unique and unbiased perspective. These are published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/addinfo Bidding on eBay Ahead of Earnings Online auctioneering behemoth behemoth (bē`hĭmŏth, bĭhē`–) [Heb.,=plural of beast], large, fanciful primeval monster, like Leviathan, evoking the hippopotamus mentioned in the Book of Job. eBay (Nasdaq:EBAY) will travel into the earnings confessional tomorrow after the closing bell. Wall-Street experts currently expect the firm to have collected 26 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , a 44-percent escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. over year-ago results of just 18 cents per share. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Zacks (www.Zacks.com) data, EBAY has successfully topped analysts' estimates by an average of 10.6 percent over the past five consecutive quarters. Most recently, the firm exceeded fourth-quarter expectations by two cents a share and subsequently rallied 7.6 percent the following session. EBAY has steadily advanced for the past several months, appreciating more than 50 percent since late November. Recently, the stock took out technical resistance near the 70 mark and has subsequently rallied to a new all-time high in today's session. The security is now edging toward support at its ascending ascending /as·cend·ing/ (ah-send´ing) having an upward course. ascending progressing to higher levels, usually used in reference to the nervous system. 10-day moving average. Click the following link to see the Daily Chart of EBAY Since November 2003 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=9944 A longer-term view of EBAY reveals that the stock has maintained a lengthy uptrend uptrend A series of price increases in a security or in the general market. Some investors believe a security tends to take on a certain inertia; as a result, these investors search for stock in an uptrend, thinking that it will probably continue to move in since mid-October 2002, tripling in value over this time frame. The shares have benefited from support at their 10-week and 20-week moving averages, with only one weekly close beneath these trendlines during the past 18 months. Additionally, in terms of relative strength, the stock has been outperforming both the S&P 500 Index (SPX (Sequenced Packet EXchange) The transport layer protocol in the NetWare operating system. Similar to the TCP layer in TCP/IP, it ensures that the entire message arrives intact. SPX uses NetWare's IPX as its delivery mechanism. - 1135.04) and the Nasdaq Composite The Nasdaq Composite is a stock market index of all of the common stocks and similar securities (e.g. ADRs, tracking stocks, limited partnership interests) listed on the NASDAQ stock market, meaning that it has over 3,000 components. It is highly followed in the U.S. (COMP - 2022.7) since early 2001. Click the following link to see the Weekly Chart of EBAY Since September 2002 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=9944 Always important to a stock is the potential for additional expansion. In our Expectational Analysis(R) (www.schaeffersresearch.com/shop/smp_faq.aspx) view, a healthy amount of pessimism pessimism, philosophical opinion or doctrine that evil predominates over good; the opposite of optimism. Systematic forms of pessimism may be found in philosophy and religion. is a good barometer for future growth potential. The options crowd has recently shifted to the bearish Bearish Words used to describe investor attitude. A bearish investor believes that a particular asset or the market as a whole will decline in value. bearish camp, as illustrated by a sharply rising Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio SOIR Simultaneous Operations on Intersecting Runways ). This indicator has surged from 1.03 on March 31 to its present reading of 1.47. In the front three-month series, there are 147 open puts in residence for every 100 open calls. What's more, this reading is just two percent shy of a 52-week high, suggesting that this pessimism among speculators may be nearing a peak. Click the following link to see the SOIR Chart for EBAY Since February 2004: http://www.schaeffersresearch.com/wire?ID=9944 Short interest on EBAY weighs in at 29.7 million shares following a 12-percent increase over the latest reporting period. The equity's short-interest ratio short-interest ratio A ratio that is used for market analysis and is calculated by dividing short interest by average daily volume. Technicians use the short-interest ratio as a tool to determine market direction. is now at a multi-year high of 4.55, meaning it would take nearly five days to cover these shorted positions at EBAY's average daily trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. . This greatly increases the chances of the security benefiting from a short-covering rally. A short-covering rally occurs when bearish speculators, who wager against the stock by borrowing shares to sell in the hopes of repurchasing them at a lower price down the road, are forced to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. the stock at a higher price, thereby reigning in losses. Click the following link to see the Shorted-Interest Ratio Chart for EBAY Since May 2003: http://www.schaeffersresearch.com/wire?ID=9944 One group that does have some faith in EBAY is the Wall-Street crowd. There are 18 analysts currently following the shares, 12 of whom name it a "buy" and only one who lists the equity as an outright "sell." Over the past six months, the tide has been turning on the Street, as "buys" have increased on EBAY, while "sells" have moved lower. Click the following link to see the Analyst Ratings Chart for EBAY Since April 2003: http://www.schaeffersresearch.com/wire?ID=9944 The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. http://www.schaeffersresearch.com/addinfo About Schaeffer's Investment Research (www.SchaeffersResearch.com) Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method |
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