Is eBay Stock a Buy? No, Here’s a Short Trade Plan
Most investors focus on whether a company beats or misses earnings expectations, but as experienced traders know, price action after earnings is the real indicator of market sentiment. While eBay’s earnings may seem neutral or even positive on the surface, the price reaction tells a different story.
Post-Earnings Price Action: Key Observations
Following its latest earnings report, eBay’s stock has shown signs of weakness, struggling to maintain upward momentum and encountering resistance at key levels. The trend is shifting downward, and by analyzing volume profile key levels, we can identify strong entry points for short positions with favorable risk-reward setups. The objective is not to fight the market but to strategically position in alignment with the ongoing decline.
The Simple Short Trade Plan
Given eBay’s post-earnings setup, we employ a structured TradeCompass approach, leveraging volume profile analysis and technical resistance zones to establish an optimal short position.
eBay Short Trade Plan – Post Earnings (Feb 28, 2025)
| Sell Order # | Price | Number of Units | % of Position Budget | Average Weighted Entry Price | Stop Loss |
|---|---|---|---|---|---|
| 1 | $65.57 | 100 | 16.67% | 65.57 | No stop |
| 2 | $66.06 | 200 | 33.33% | 65.90 | No stop |
| 3 | $67.13 | 300 | 50.00% | 66.51 | $67.51 |
- Weighted Average Entry Price: $66.51
- Total Position Size: 600 shares (adjust position size accordingly)
- Full Position Stop Loss: $67.51
- Take Profit Level: $62.02
- Risk-Reward Ratio: 4.5:1 (Potential reward of $5,400 vs. max loss of $1,200)
Final Thoughts
The post-earnings reaction in eBay (EBAY) suggests continued weakness, making it a compelling short opportunity. Rather than randomly entering a short position, traders should wait for retracements into key resistance levels before initiating the trade.
Taking partial profits at key levels can help manage risk and lock in gains, but the primary focus is on a clear target at $62.02. This level aligns with volume profile support and price structure, offering a logical exit point for the trade.
⚠️ Disclaimer: This is not financial advice. Trade at your own risk. For additional insights, visit ForexLive.com for professional market perspectives and analysis.