PayPal (PYPL) Play On BB Squeeze - RVI + ADX

Using my self-build scanner, the 20-day SMA show that Paypal is giving a crossover, and this indicate an upside trend is going for form, this warrant to look for a trade.

PayPal have been showing decline for quite some time in 2023, but the decline have rather been flat. Actually I find PayPal stock price quite undervalued compared to the transactions that they have done for 2023.

From the BB 20, we can see that PayPal have formed a narrow band and when the bands are relatively far apart, that is often a sign that the current trend may be ending. When the distance between the two bands is relatively narrow that is often a sign that a stock may be about to initiate a pronounced move in either direction. In this case we can see from SMA that PayPal is going to initiate an upside.

Remember it is not always buy at its lowest, then we can make profit. So I decided to use my own strategy of RVI + ADX.

If we look at the first 2 hours of trading, we can see that there are attempts to make an upside, but it has not been able to make a significant one.

So by using Trading View, we can see that ADX is trending above 40 at around 2315hrs and RVI remain above 50. This is where I decide to set my entry price and also place my Stop Loss price at around $56.70, around 11.30pm SGT.

As I mentioned in my previous article, I will be monitoring how the ADX would be moving, it should be moving upside in a bullish set up, and it did move upside for a while, before going down.

At the same time, I notice that the RVI is starting to show sign of going below 50, which could indicate that it might turn bearish soon.

That is where I decided to exit around $57.60. This help me to make a profit of 1 dollars per share. Not a bad short trade to take advantage of the short upside squeeze.

Using the Moving Average indicator to give us a confirmation that PayPal is going to have a crossover and an upside reversal might happen helps, and with Bollinger Band showing that a squeeze towards the bullish upside.

This is why I decide to use RVI + ADX on a 15 min chart to find the entry and exit, with stop loss to mitigate the risk as well.

Appreciate if you could share your thoughts in the comment section whether you think PayPal would continue to display upside prior to its next earnings release.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.