PayPal (PYPL) Stock Attracts Deep Pockets
NEW YORK (TheStreet) -- Carl Icahn recently sold his stake in eBay (EBAY) and rolled the proceeds into PayPal (PYPL) - Get Report , according to media reports. Does the chart of PYPL look any different with this new information?
Looking at other names that Icahn has positioned, I would assume -- as we have no first-hand knowledge -- that his trading desk used the price weakness in August and September to buy the bulk of his new position. Notice in the chart, above, how volume increased in the latter part of August as prices broke below $34. This combination of falling prices and increased volume makes it easier to acquire a long position without attracting attention. Now, look at the next selloff at the end of September. The On-Balance-Volume (OBV) line does not make a new low with the price action and the momentum study makes a higher low in the bottom panel -- these divergences also suggest a scale-down buyer.
Prices and the OBV line turned up at the beginning of October. After some period of sideways price action we would look for PYPL to trade higher. A sell-stop at $32 would be a good idea.
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