After the horror crash in early February, the dust has now settled, and PayPal (NASDAQ:PYPL) has disappeared from the newspapers. Even in various investment forums, PayPal has become uninteresting. It seems like the majority of investors have focused on other stocks.
This is a standard signal for a stock that it potentially reached its bottom and that the long-term trend begins to shift. Furthermore, we can observe large transactions by banks and insiders, who, almost without exception, have increased their positions in the last few weeks. The behavior of large investors can be observed on the following page.
Technical View
Our last article expected a corrective surge in a wave (iv). We have now changed this expectation and assume that we are already forming a bullish wave 1-2 setup.
After all, the price was able to surge more than 33% since it was low at $92, and a promising reversal signal has formed in our indicators. We observed that PayPal formed five small different waves in its wave (i), which also supports a bullish reversal.
The price has now established a small (a) and an overshooting (b) wave in the last few days. The wave (c) should move towards $104, where the critical 61.8% retracement is located. In this area, the price should stabilize, and wave three should start.
If the price makes it above the last high of wave (i) at 122.79$, the price target of wave (iii) will be unlocked. We expect that wave (iii) will easily reach $153 or more, depending on the volatility. The movement of PayPal has to be observed very carefully to spot possible changes in the chart formation.
The important support at 92.28$ must not be breached; otherwise, the bullish wave 1-2 setup is invalidated. Likewise, this would mean that the price would establish new lows below $90.