In the first quarter of 2024, PayPal Holdings Inc (NASDAQ: PYPL) managed to perform well. The company reported earnings that surpassed expectations, igniting a surge in its stock price.
Their earnings per share were $1.40, which was higher than analysts’ expectations by $0.18. Furthermore, the $7.7 billion in revenue they reported for Q1, also beat predictions by $180 million.
Despite a 1% decline in active accounts year-over-year, reaching 427 million, the company showcased promising growth indicators, with a notable 14% increase in total payment volume to $403.9 billion and a surge in payment transactions to 6.5 billion.
Looking forward, PayPal thinks they’ll keep doing pretty well in the second quarter of 2024, even though their revenue growth might be a bit slower than what most people expect. The company’s CEO, Alex Chriss, talked about how they’re focusing on making sure PayPal stays successful in the long run.
Now, against the backdrop of PayPal’s impressive financial results and market response, let’s delve into the technical analysis of PYPL stock to discern potential trends and opportunities in the days ahead.
The roller coaster ridePayPal’s stock has been a roller coaster ride since 2017. It is currently trading at the same levels it was trading back in mid-2017, which means long-term shareholders have generated no returns over the past 7 years.
However, amidst this prolonged stagnation, there have been moments of exhilarating ascent, particularly during the post-COVID rally. During this period, the stock surged from around $80 to over $300, offering a glimmer of hope to investors. Yet, this euphoria proved short-lived as the stock swiftly plummeted back to sub-$80 levels between September 2021 and June 2022.
Since then, what we have seen is the start of a second slow and gradual decline from $100 levels to $50. But this decline seems to have come to an end in October 2023.
What does this mean for investors who want to buy the stock for the long term? They can purchase the stock at the current level near $65 while keeping $50 as a floor. If the stock breaks below, it is better to sell it at that juncture.
Short-term strength, but resistance at $68On the short-term chart of PayPal, we can see that the stock has been on an upward trend since November 2023. Though it has been range-bound since February 2023, $58.2-$62 has emerged as an accumulation zone and $68 has emerged as a strong short-term resistance.
For traders who are bullish on the stock, there are two plays. Either they can wait for the stock to fall a little and start buying it while keeping a stop loss at $58.2 or doesn’t fall below the short-term upward trendline. They can also wait for the stock to close above $68 and buy it then while keeping a stop loss at $62. The immediate upside targets are $77.5 and $88.
For traders who hold a bearish outlook, they can short the stock at the current $66 level with a stop loss a few cents above $68.6 The first profit target for short trades is $62 and the second profit target is $58.2.
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