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.