eBay should undergo some profit-taking after the rebound in recent sessions.

The company displays undeniable qualities but the future is not bright. Even if sales are expected to increase on the current fiscal year, margins are expected to decrease this year. Moreover, analysts have decreased their revenues and EPS estimates and now expect a net loss in 2014. Furthermore, the security seems highly overvalued compared as suggested by its EV/EBITDA ratio at 11.1 for the current year.

From a technical viewpoint, the proximity of the USD 53.5 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.

Due to the technical patterns and fundamentals that do not justify the current valuation of the group, investors can open a short position close to the USD 53.45 resistance. The price target being set at USD 48.25, a stop-loss order could be placed above USD 53.45 limiting further risks.