Earlier today I noted some news out of eBay Inc (EBAY) which Elizabeth Harrow details here. With the Dow Jones Industrial Average (DJIA) now down 800 points I was hesitant to come back to eBay but I thought I should at least touch on the points I made last month in - Is the Worst Yet to Come for eBay Inc. (EBAY)? - where I discussed the risks to the stock.

Shares of EBAY are down 11% here and hitting a new annual low. Some of this loss could be the function of the broad market malaise (a description I just heard a TV commentator use) but I still think there is a breakdown to be aware of.

Chart Courtesy of Thomson Financial

When I profiled this chart last month, I said the following...

"As it stands now, EBAY is flirting with support than has been in place since mid-2003. If the bulls continue to throw in the towel, which I think is likely, it would add selling pressure to a stock that is breaking support. That has the potential to feed on itself. I think this is a very vulnerable situation. It is possible that the bulls step up and defend the stock here but this hasn't exactly been a market where convictions run high. "

According to Zacks, 9 of 19 analysts (47 percent) currently rank the stock with a "buy" rating. Three months ago 61 percent of the ratings were "buys". I think we are seeing a sentiment shift as the Street walks away from the stock and today's breakdown isn't going to help that situation. Yes, part of the decline could be related to the broad market woes, but I would still think the overwhelming risk is that these former bulls sell into rallies and cap bounces.