PayPal Holdings Inc. (PYPL) just hit a milestone that chart-watchers love to see. The payments giant has formed a Golden Cross, a widely followed technical pattern that occurs when a stock's 50-day moving average rises above its 200-day moving average. For many traders, that's a sign that long-term momentum may be turning positive.
The signal comes just weeks after billionaire hedge fund manager David Einhorn disclosed a new position in the company. So you've got a famous value investor and a bunch of momentum traders suddenly looking at the same stock, which is a bit like a chess grandmaster and a speed chess player both deciding they like the same opening move.
Einhorn's New Bet
According to DME Capital Management's latest Form 13F filing, which reports the holdings of Einhorn's Greenlight Capital funds, Einhorn initiated a new position in PayPal during the second quarter. He purchased approximately 1.4 million shares worth about $61.5 million at quarter-end.
That made PayPal one of Greenlight's notable new additions for the quarter. It's a signal that the veteran value investor saw an opportunity in a company that has spent the last few years rebuilding investor confidence after its pandemic-era boom faded. Remember, PayPal was a lockdown darling, and when the world reopened, the stock took a beating. But Einhorn is known for buying when others are skeptical.
Of course, there's a caveat with 13F filings: they reflect holdings as of June 30 and don't tell you whether Greenlight has since increased, reduced, or exited the position. So take it with a grain of salt, but it's still a notable vote of confidence.
The Chart Agrees
Since those holdings were reported, PayPal's stock has continued to strengthen. The newly formed Golden Cross is one of the most closely watched technical signals in the market because it suggests that a stock's intermediate-term trend has overtaken its long-term trend. While no chart pattern guarantees future returns, many investors view it as confirmation that bullish momentum is building.
The signal arrives after PayPal shares climbed steadily through recent weeks, pushing the stock above both its 50-day and 200-day moving averages. That's a pretty clear statement from the market that the tide may be turning.
What It All Means
Neither a billionaire investor's purchase nor a Golden Cross alone is enough to predict where PayPal goes next. But together, they tell a more interesting story. Einhorn's new position reflects a fundamentally driven investment thesis, while the Golden Cross suggests the market's technical picture has begun improving as well.
It's a rare moment where a prominent value investor and momentum-focused traders appear to be arriving at the same stock from different directions. That combination could keep PayPal on investors' watchlists as its turnaround story continues. Whether it's a coincidence or a sign of something bigger, it's definitely worth paying attention to.
