Earnings season is chugging along, and investors continue to feel slightly optimistic. Netflix (NASDAQ: NFLX) was the latest company to post an “earnings beat,” with an earnings per share (EPS) of $1.47 vs. the expected $1.04. It was a huge surprise for shareholders and analysts alike, causing NFLX shares to rise as high as 10% in after-hours trading.
Those gains mostly retreated throughout today’s trading session, on the heels of some not-so-great guidance from company leadership, but in general, NFLX became another brick in the “no recession” wall.
Other companies had an impressive Q3 as well. Bank of America (NYSE: BAC), for example, surpassed EPS expectations too ($0.56 vs. $0.51 expected), following J.P. Morgan’s (NYSE: JPM) strong earnings report on Tuesday.
And yes, there are still reasons to be worried about a bearish flip in sentiment. The trade war is still up in the air, and the Fed might stop cutting rates if the economy continues to show signs of life.
But overall, bulls can finally feel good about the future.
For the short-term, at least.
Plenty of consumer-facing companies are exhibiting that same cautious optimism. Share prices are rising with a market-wide recovery on the docket.
One such company – Ebay Inc. (NASDAQ: EBAY) – is even approaching what could turn out to be a major rally.
Potentially to a new yearly high.
In the weekly candlestick chart above, you can see that EBAY’s been in a slow uptrend since the start of the year. The stock encountered some turbulence back in August and September but is now finally turning the corner.
After nearly hitting the lower Bollinger Band (BB) one week ago, the general market’s recent lift has brought the current weekly candlestick above the last two candle bodies. Typically, that’s not good enough for me to go long without BB contact.
However, the 50-week moving average has consistently pointed “up” since June. To me, that’s a very strong indicator of a long-running uptrend, making the recent price action good enough to warrant a long position, provided that EBAY moves past the current week’s high (to $39.58).
At that point, multiple levels of resistance stand in the way of a true rally. But because a higher low was just set (relative to the triple bottom low spanning March-June), it appears as though EBAY’s determined to set yet another one, possibly around the yearly high at $42.00.
If that happens, bears had better look out, because EBAY could very well go on a Q4 “moonshot” to close out 2019.
It’s already been a strong year for EBAY, but based on what the chart is telling us, more gains are coming.
And they might be here sooner than most investors think.
