PayPal Stock Shows Relative Strength As It Struggles To Break Out After Forming Cup-With-Handle Base
The Relative Strength (RS) Rating for financing giant PayPal rose into a new percentile Tuesday, climbing to 81, up from 77 the prior trading session. PayPal stock rose about 1% Tuesday afternoon, to 292.29.
The RS Rating bump up means that PayPal stock, the IBD Stock Of The Day Tuesday, is performing in the top 19% of all stocks, regardless of industry group. Market history shows that top-performing stocks often have an 80 or better RS Rating in the early stages of their moves.
PayPal Stock Formed Cup-With-Handle Base
After three quarters of boisterous growth including year-over-year EPS growth of 41%, 30% and then 85%, last quarter PayPal's EPS grew a milder 7% to $1.15. Similarly, revenue grew 25%, 23% and then 31%. Last quarter, revenue grew 19% to $6.24 billion. Starting in February, PayPal stock formed a long cup-with-handle pattern. But it dropped back from an all-time high 310.16 on July 26, and has moved sideways for a couple of weeks following the weaker-than-expected earnings results.
Among its other key ratings, San Jose, Calif.-based PayPal stock has a 90 EPS Rating, of a best-possible 99. Additionally, its 93 Composite Rating puts it in the top 7% of stocks on a group of key metrics. PayPal has been growing amid expansion of its Venmo peer-to-peer payment app, as well as its traditional PayPal financing arm
IBD's Composite Rating combines five separate proprietary ratings of fundamental and technical performance into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
PayPal stock earns the No. 4 rank among its peers in the Finance-Card/Payment Processing industry group. Square and Evertec are also among the group's highest-rated stocks.
PayPal stock is working on a flat base with a 310.26 entry. See if the stock can break out in heavy volume. Be aware that it's a third-stage base. Such later-stage patterns are more likely to fail than earlier-stage formations.
As you try to find the best stocks to buy and watch, be sure to pay attention to relative price strength.
This exclusive rating from Investor's Business Daily measures market leadership with a 1 (worst) to 99 (best) score. The rating shows how a stock's price movement over the last 52 weeks compares to all the other stocks in our database.