Concerns about the business model of the digital payments industry appear to be subsiding, according to a Reuters article. The risks associated with the entry of giants like Amazon may have been overestimated.
Paypal [PYPL.O] closed at $197.3 (+ 3.3%) and is at $196.6 (-0.3%) in pre-trading. The short strategy previously took the first target at $196 and approached the second target at $175. The scenario seems to be improving significantly for PayPal. The closure of the Short is recommended and a long set up should be being prepared. In particular, the first resistance level that will tell us about the goodness of the bullish movement is the one in the $200/$204 area. The break in strength of this price range should allow short targets towards $210 and $222. The latter, however, is a very hard obstacle to break. In fact, if Paypal were to break $222, the potential would reopen to return to the 2021 maximum at $209. It’s still early to say, of course. So, let’s go step by step.
We recommend going LONG on the stock on the break of $200/$204 by buying the Leverage Shares PayPal 3x ETP (ISIN: XS2297550217), with a short-term target towards $210 and later, in case of a breakout, at $222. Alert/stop loss should be above $195 (closing daily).