They say that the three big risks are: (i) Slowing growth, (ii) competition, and (iii) uncertainty around new monetization models.

Presently the EBAY stock is trading at $30.30, and UBS rates the stock Neutral. UBS report June 15 report

In valuing Ebay, UBS has a discounted cash flow value of $33 and a 12-month target of $35 on the stock. If those values are reasonable, then I'd need a price of about $26 to interest me.

Is that likely? Let's look at the RSI.

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The RSI of the Monthly is just below 30, so it's in my Accumulation Zone by that measure. In fact the stock started its bear phase about 30 months ago, and I have been patiently waiting for it to become attractive once again. Unfortunately the RSI of the Weekly is above 32, so at a current $30.29, the price is still too high.

A price of 26 would put the stock where? The chart shows that the 2H03 price level was about $26, and I think the next wave down in U.S. equities could take EBAY down to that level, where the stock would be trading at about 30 PE.

The RSI for the Monthly (28.9), Weekly (32.1), Daily (35.7) and Hourly (44.5) is a little rich due to a recent rally. But I buy stocks of strong companies on price weakness, don't I?

So I think that in the next couple, maybe three or four months, "my" EBAY is going to come to me, and when the RSI indicators are lined up properly with the stars, and the Big Media people are bad-mouthing this very well-managed company, I will step in to go long.

You see, I agree with UBS that Ebay's 2007 earnings will come in at about $1.24, and in a bull market, I think traders will give it a PE based on 1-year forward earnings of 32X, which would take the price up to $39.50-$40, which just happens to be the average price paid from 2Q04 to 2Q06.

So, yes, the law of big numbers is hitting Ebay; revenue growth is slowing. Big deal. Look at the positives that UBS lists for this company. In a bull market, traders focus on the positives.

I mean the glass is always half full to people like CNBC's Larry Kudlow, but let's be practical. In bear markets, traders see it as half empty, and the same people change their perspective in bull markets.

You can stick this online commerce giant into any sector you care to, but for me I put it into GICS sector 25 (Consumer Discretionary). The company trades in goods, and the trading goes up when people have deep pockets in their jeans.

In summary; I'd say EBAY is almost worth the risk. :-)

This UBS report on EBAY is an excellent piece of work to keep in your Cara 100 binder. UBS report June 15 report

GICS 25 eBay Inc. (EBAY) (EBAY) Financial Data