The PayPal stock price has a difficult September as it tumbled by almost 10%. The PYPL stock is trading at $260, which is about 12% below the highest level in September. It also underperformed the S&P 500 and the Dow Jones.
PYPL stock lagged
September was a relatively difficult month for stocks as the Federal Reserve suddenly turned hawkish and as the Evergrande crisis intensified.
The Fed confessed that inflation was rising at a faster pace than expected and that it will remain high for a while. In its decision, the bank said that it will likely start tapering in the coming months and that it will start hiking rates in 2022.
Meanwhile, the Evergrande crisis pushed more people to exit stocks fearing that there will be contagion in the financial market.
PayPal made some progress in September. The company spent about $3 billion to acquire Paidy, a leading buy now, pay later brand from Japan. This was part of the company’s strategy to take advantage of the fast-growing industry.
Additionally, PayPal unveiled an updated application as it matches towards creating a super-app. A super-app is an individual application that allows customers to do multiple things like trade stocks and cryptocurrencies, and even borrow money.
The company announced that it was exploring a feature to let Americans trade stocks. In other words, PayPal wants to offer additional services than Robinhood.
Looking ahead, in October, the PayPal stock price will react to several things. First, on a macro issue, investors will focus on the US debt ceiling debate. Failure to pass the bill will likely lead to a deep sell-off of most stocks, including PayPal.
Second, PayPal is expected to publish its earnings on October 20th. Analysts expect that the company made $6.25 billion in the third quarter after making $6.24 billion in the previous quarter. It made more than $5.46 billion in the same quarter in 2020.
PayPal stock price forecast
The PayPal stock price is trading at $260. On the daily chart, this price is along the ascending trendline that connects the lowest levels since March this year. At the same time, it has dropped below the 25-day and 50-day moving averages (EMA). The MACD has also moved below the neutral line. It has also declined below the key support level at $266, which was the lowest level on 19th August.
Therefore, the PYPL stock will likely keep falling as bears target the key support at $215, which is about 15% below the current level.
