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Swing Trade Idea (EBAY) – March 20, 2024

Our bearish trade for Wednesday, March 20th is EBay Inc. (EBAY). EBAY is part of the Consumer Discretionary Sector, which traded at 0.87% over the last month, with EBAY overperforming at 19.26% over the same period.

EBAY overperformed relative to its sector, and has now traded into an area of resistance at $52, where it is showing signs of exhaustion. We will use a Credit Spread to collect a premium/width of over 38% if EBAY does not trade higher over the duration if this trade. This is an excellent risk/reward ratio.

As a close, if EBAY were to trade above $53 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $2.28.