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PayPal shares came under heavy pressure following disappointment at the company's Innovation Day and fell below key supports. After the stock was able to overcome the trend line at $62.70 and the GD200 at $62.98 two weeks ago, the price fell below again after the disappointing PayPal event. The joy about a possible recovery in PayPal shares has evaporated for the time being, and investors should continue to avoid the paper.
Analysis and implications
From a technical perspective, the failed breakout attempt suggests that the price could continue below the two resistance levels at $62.70 and $62.98 in the near term. Supports lie at $60.11 and the January low at $56.47. Should these be broken, the last bastion would be the November 8, 2023 low at $53.55 before heading towards the October 27, 2023 six-year low at $50.25.
The negative reaction of investors to PayPal's presentation shows that market participants' expectations were not met. This event could affect confidence in the Company's future prospects and the industry as a whole. There is also a risk that the negative trend in PayPal shares will impact the entire payment services market as investors may become unsettled and explore alternative investment options.
The short-term outlook for PayPal shares therefore remains uncertain, and it is advisable to closely monitor further price developments before making any investment decisions.