EBay has rallied 26 percent in the past 12 months. According to one trader, bulls are now taking sizable positions in the stock, and there may be reason to join them based on the chart.
"We've seen institutional buyers of upside calls, call spreads and put sellers," said Andrew Keene of Keene On The Market. "I think eBay is headed a lot higher."
A call is a bullish bet giving purchasers the right to buy a stock at a set price within a given time frame. Likewise, selling a put is also a bullish wager that a stock price won't fall below the strike price of the put.
Since the start of 2013, eBay shares generally traded in a range between $50 and $60. But in mid-May, the stock broke above $60 to make an all-time high of $63.30. It opened Wednesday at $60.60.
A short-term chart of eBay also shows the stock has repeatedly tested a significant support level only to bounce higher afterward.