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U.S. e-commerce sales topped $256 billion in 2012, according to Statista Research, up nearly 13% from 2011. Of this amount, online retail sites brought in the largest chunk of revenue, at $186.2 billion.By 2016, industry analysts predict online retail revenue will nearly double, reaching at least $361.9 billion. Research by eMarketer suggests the number of online shoppers in the United States will also grow, topping 175 million by 2016, up from 137 million in 2010.
The stock is currently on a tear. In a little over a month, shares have risen about 16%, from a mid-March low of $49.55 to the current level, near $57.50. And the technicals point to further gains ahead.Shares have been on a major uptrend for over a year. In February 2013, the stock peaked at a multi-year high of $57.27. Unable to sustain momentum, it quickly sank to important support near $50 by mid-March. However, shares just as quickly bounced off support and have been on the ascent for the past four trading weeks.On Wednesday, April 10, the stock blasted past the recent $57.27 high, hitting a new 52-week high, and closing the day at $57.30. In doing so, a small U-shaped basing pattern was bullishly completed.The measuring principle for a basing pattern -- calculated by adding the height of the pattern to the breakout level -- projects a new price target of $64.99 ($57.27 - $49.55 = $7.72; $57.27 + $7.72 = $64.99). At current levels, this target represents 13% potential returns.If the stock approaches this price range, it would well exceed its 2004 all-time high near $58.20. With no historical overhead resistance in sight, shares could potentially move much higher.One factor that could spur shares in the near term is upcoming first-quarter 2013 results, scheduled to be reported April 17.For the upcoming first quarter, analysts project revenue will rise 15% to $3.8 billion from $3.3 billion in the comparable year-ago period. For the full 2013 year, analysts expect increased e-commerce sales will push revenue up 16% to $16.4 billion compared to $14.1 billion last year.The earnings outlook is similarly optimistic. In all four quarters of 2012, the company beat earnings expectations. For the upcoming first quarter, analysts project earnings will increase 13% to $0.62 per share compared to $0.55 in the year-earlier quarter. For the full 2013 year, analysts estimate increased e-commerce demand will spur a 16% increase, with earnings reaching $2.74 per share from $2.36 last year.Risks to consider: According to a study by Forrester Research, 33% of online shoppers start their search for new items on Amazon.com. For eBay to truly dominate the e-commerce marketplace, it will need to shift buyers' perception so that consumers think of eBay for new goods, before Amazon. However, eBay is working toward this goal.The company is aggressively developing its mobile platform to attract new shoppers -- particularly in developing countries -- who tend to use their mobile devices for retail transactions. As eBay engages more global buyers, the company should continue to grow well into the future.Recommended Trade Setup:-- Buy EBAY at the market price-- Set stop-loss at $49.20, slightly below current support-- Set initial price target at $64.99 for a potential 13% gain by mid-2013
Many investors hold strong opinions about the 200-day MA... but is it actually important?