Signal: PayPal Stock Could Give Back July Gains

Shares of PayPal Holdings Inc(NASDAQ:PYPL) are up 4.7% to trade at $58.72, pacing for a third win out of the past four. The equity has gained 35% since the start of July, but a pullback could be around the corner, as PYPL flashes a bearish sentiment signal. According to Schaeffer's Senior Quantitative Analyst Rocky White, PYPL shares are within 0.75 of the 100-day moving average's 100-day average true range (ATR), after remaining below it 80% of the time in the past two weeks and in 80% of the last 42 trading sessions. This signal has occurred four times in the last 10 years, after which PYPL was lower one month later 33% of the time, averaging a 5.4% loss. From its current perch, a pullback of this weight would put PayPal back below its year-to-date breakeven level. Keep an eye on PYPL's 14-Day Relative Strength Index (RSI) as well, deep in "overbought" territory at 79.2. PayPal stock's Schaeffer's Volatility Scorecard (SVS ) comes in at 74 out of 100, meaning the security has consistently realized higher volatility than its options have priced in over the past 12 months.