PAYPAL, Exponential Growth But This Can Reverse The Situation!

17 jul 2020

Hello Traders Investors And Community, welcome to this analysis where we are looking at the single stock value PAYPAL 4-hour timeframe perspective, the current really interesting formation forming, and what we can anticipate of this stock the next time. Last weeks PAYPAL was in a really strong exponential growth uptrend with the candles on weekly and monthly chart nearly going to the roof which makes it a solid stock in the large-cap stocks with high capitalization and therefore a clear winner since the corona-breakdowns seen this year where many are still below the all-time-highs established before the crisis but such growth can not go on forever as it is naturally the case that after such a period comes minimum a correction when not a bigger pull-back int his case I detected some meaningful signals which can determine the further outcomes of this stock and pointing out a possible heavy reversal.

As you can watch in my chart PAYPAL is just confirming a possible classical head and shoulder top formation as I pointed such a formation out in previous analysis, it has already formed the left shoulder and the head and is now going on to form the overall right shoulder of this formation. Such a formation can confirm bearish continuation to the downside within a high possibility spectrum, therefore, we can expect PAYPAL to look for the targets when it confirms this formation to the downside is you can watch it in my chart below the blue marked neckline. When this happens properly PAYPAL will activate the minimum target zone you can see marked in orange at the 150 level, which is the minimum percentage projection from the head to the neckline to the downside which does not mean PAYPAL will reverse immediately and don't fall more to the downside.

It all depends how sudden the bearish breakdown happens and if PAYPAL can reverse in the target/support zone or not, when it does not reverse in this zone and falls more under the given circumstances there is a very high possibility given that it falls more to look for the major gap waiting in the downside at 130 to be filled. This scenario will highly likely confirm when PAYPAL shows high volatile movements to the downside after the major head and shoulder top formation has confirmed properly when PAYPAL confirms this scenario and marks at the gap zone it has to show how it develops from there and if the chance for a reversal can be marginally anticipated. Counting these factors together we should not ignore the downside coming ahead with this stock as it reached a really high value in a short time where unconventional growth happened which is not overall fitting to the rest market environment.

Comparing the stock to the overall main market and to the SPX500 or DOW this is a classical example on how speculative driven and overvalued the market, especially single stocks like PAYPAL became since the corona breakdowns seen this year as many retailers rushing into the space to participate while smart-money staying out and on the sidelines. Besides that, the growth seen has not a solid fundamental background with the real economy growing harmonically with the stock-market such rallies are highly speculative and therefore can reverse rapidly. We will examine how this whole dynamic will develop further next time and if there can be a stabilization into a normal constant growth environment to develop in destiny or an increase of bearishness before that can be considered but as PAYPAL is a good example currently in this case the bearish scenario should not be kept by side.

In this manner, thank you for watching, support for more market insight, have a great day, and all the best to you!
Comfort and prosperity have never enriched the world as much as adversity has.

Information provided is only educational and should not be used to take action in the markets.