Is it too risky to buy PayPal stock as it hits a 52-week low?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jan 23, 2022
  • Paypal broke its 52-week low; now the stock is trading below this low as it seeks some price consolidations.
  • The stock is trading below its five major moving averages, suggesting that it's is under huge selling pressure
  • The stock’s current pivot price level is $175.4, which is way above the current price.

PayPal Holdings Inc. (NASDAQ:PYPL) is the world’s most popular digital money transfer platform. In today’s stock market, the fast-growing company remains one of the most well-known equities. However, is it too risky to buy PayPal stock as it hits a 52-week low?

Is PayPal stock bearish? 

If you look at the PayPal stock chart, you will see that the sharp value of the stock is 0.67, now bullish investors need to be very sceptical with stocks having a sharp value of less than 1, but if you are a bearish short seller, this is no doubt something to celebrate.

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The current price of the PayPal stock is $162.25, which is less than Friday’s closing price of $163.54. This means that so far the stock is down almost 6% since the market bell rang on Friday. Also, the current price of the stock is lower than last week’s closing price. This is an indication of a bearish pattern. Last week, the stock was trading at $187.2.

Source – TradingView

Now, to check if the stock is trading in bullish or bearish mode, we will check 50, 100, and 200 days moving averages. The current value of the 50 days moving average is $190.43, the moving average for 100 days is $226.6, and the 200-day moving average is $250.17. Based on this model, the stock is trading below major moving averages. In summary, currently the stock is trading below the 50, below the 100, and below the 200-day moving average. In general, the stock is trading below five major moving averages suggesting that the stock is under selling pressure.

In addition to moving averages, pivot points are also used to track the minimum and maximum prices of the stock. The current pivot price level is $175.4. The chart also has three support levels $170.92, $168.56 and $161. Also, the three resistance levels are $177.76, $182.24 and $189.8. All this indicates that the stock is in a downtrend.

Should you buy PayPal stock right now?

PayPal stock is nearly 40% below its 52-week high, which means that it is too risky to buy the stock right now. The stock is in a consistent downtrend, and having broken its 52-week low support, this means that currently, the stock doesn’t have any support levels, making it even riskier to buy right now. However, some analysts believe that buying the dip could result in long term profits, so as an investor you should keep watch until the stock finds some consolidations, but meanwhile it’s advisable to stay away from PayPal stock.

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