EBay (EBAY) Showing Signs Of Being A Roof Leaker

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified eBay ( EBAY) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified eBay as such a stock due to the following factors:

  • EBAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $526.4 million.
  • EBAY has traded 12.0 million shares today.
  • EBAY is trading at 1.53 times the normal volume for the stock at this time of day.
  • EBAY crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on EBAY:

eBay Inc. provides online platforms, tools, and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. Currently there are 18 analysts that rate eBay a buy, no analysts rate it a sell, and 9 rate it a hold.

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