Electronic Arts's most recent trend suggests a bearish bias. One trading opportunity on Electronic Arts is a Bear Call Spread using a strike $95.50 short call and a strike $101.00 long call offers a potential 44.36% return on risk over the next 7 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $95.50 by expiration. The full premium credit of $1.69 would be kept by the premium seller. The risk of $3.81 would be incurred if the stock rose above the $101.00 long call strike price.
The 5-day moving average is moving down which suggests that the short-term momentum for Electronic Arts is bearish and the probability of a decline in share price is higher if the stock starts trending.
The 20-day moving average is moving down which suggests that the medium-term momentum for Electronic Arts is bearish.
The RSI indicator is at 35.16 level which suggests that the stock is neither overbought nor oversold at this time.
To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here
LATEST NEWS for Electronic Arts
How to Trade Activision Stock If It Hits New Lows
Wed, 06 Mar 2019 18:46:52 +0000
It's been a rough run for video game stocks, even as the stock market has been bouncing back. Of the "big three," Activision Blizzard (NASDAQ:ATVI) has easily been the worst performer when compared to Take-Two Interactive (NASDAQ:TTWO) and Electronic Arts (NASDAQ:EA). ATVI stock is down more than 43% over the past year, compared to just 22% and 21% for TTWO and EA, respectively.But it's not just competition between the three that are causing issues, there's also Epic Games — 40% owned by Tencent (OTCMKTS:TCEHY) — which owns Fortnite. And don't even get me started on the continued momentum of the Nintendo (OTCMKTS:NTDOY) Switch.That said, Activision has some company-specific issues that have caused it to flounder more than its peers. So what can be done and where should investors turn? More importantly, what's at stake for Activision stock? First, let's discuss the elephant in the room: battle royale games.InvestorPlace – Stock Market News, Stock Advice & Trading Tips Activision vs. FortniteFortnite was initially released as a paid early-access title in its PvE (player versus environment) format, now dubbed "Save the World." But it wasn't until PlayerUnknown's Battlegrounds kick-started battle royale into the public consciousness that Fortnite's own battle royale was born. As a free-to-play title, Fortnite racked up tens of millions of users in a relatively short span. Eventually, it found its way onto mobile as well. While not the first of its kind, Fortnite's success marked a turning point in the gaming industry. * 7 Cheap Stocks Under $5 That Could Soar This allowed the company to hit 125 million users last June and top 200 million registered users before the end of the year. That's a lot of players for one game. If you're wondering how the company makes money, it thrives off of in-game purchases. For a while, game-makers were able to sidestep the battle royale trend. But eventually, it caught up with them, Activision included.However, Activision has had some missteps since. Not only did its competitor Take-Two unveil Red Dead Redemption 2 late last year, but its own Call of Duty game was met with less enthusiasm than in year's past, despite including its own battle royale mode. To make matters worse, Electronic Arts just released a dedicated battle royale game, Apex Legends. The game should not be taken lightly, with it already hitting 50 million users in just 30 days.In January Activision announced it will no longer have the rights to its Destiny franchise as well. While some analysts were optimistic about the savings for long-term operating costs, the move dealt a blow to revenue. Trading ATVI Stock Click to Enlarge If management is able to quickly right the ship, then ATVI stock may be okay. Remember, shares are down more than 50% from the highs less than six months ago. But it's hard to say a bottom is in. Above is a six-month daily chart of ATVI stock, while below is a five-year weekly look.On the daily chart, shares are trying to put in some higher lows after that February 11th drop to $40. However, it remains under downtrend resistance (blue line) as well as the 21-day moving average. The 50-day isn't doing it any favors either. Until ATVI stock is above these marks, it's hard to get too bullish or even feel that the stock is done going down. Click to Enlarge On the weekly chart, it's more of the same. While we have Activision stock consolidating in the low $40s, it's also clear the stock has been locked in a deep downtrend.Once $45 failed to hold, it brought the $38 level into question. I want that level to hold, but it's unclear if it's strong enough to support a break of $40.Should ATVI stock lose $40, $35 could be the eventual bottoming spot, a level that was big-time support in 2016 twice before Activision went on a prolonged rally. * 3 Small- to Mid-Cap Video Game Stocks to Buy I don't have confidence in a long setup for ATVI stock at the moment. If anything, going short on a break below $40 gives bears a solid risk/reward, but we'll have to see how it sets up going forward. It still needs more time for bulls to see a quality setup in my view.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Blue-Chip Stocks That Will Lose You Money * 7 Cheap Stocks Under $5 That Could Soar * 7 Stocks Under $10 You Shouldn't Buy Compare Brokers The post How to Trade Activision Stock If It Hits New Lows appeared first on InvestorPlace.
It’s Still ‘Game On’ for Activision Bears
Wed, 06 Mar 2019 14:40:23 +0000
It's not Atari (OTCMKTS:PONGF). Still, conditions remain challenging for Activision (NASDAQ:ATVI) bulls and one where bears are readying to mount another offensive strike and profitable victory in ATVI stock.Source: Shutterstock Let me explain.Let's start by reiterating what I pointed out above: ATVI stock isn't a "game over" situation like bankrupt 80's gaming sensation Atari. And as I've said before, the secular prospects for the gaming industry backed by exciting markets and an expanding and an emerging and more inclusive demographic base, certainly look strong over the long haul. But short-term hardships shouldn't be ignored either.InvestorPlace – Stock Market News, Stock Advice & Trading TipsIn today's market, ATVI is feeling the heat from competition like privately held Epic Games and its free-to-play gaming sensation Fortnite, as well as peers like Take Two Interactive (NASDAQ:TTWO) and Electronic Arts (NASDAQ:EA). And as warned in mid-November, Activision shares aren't above losing quarterly battles or beyond preventing bearish assaults in the ATVI stock price in the short-term.Now and following February's weak quarterly report and below-views guidance, combined with a weak-looking Activision stock chart, shares are once again in the bears' technical crosshairs. * 10 Hot Stocks to Buy Right Now ATVI Stock Weekly Chart Click to EnlargeOur November forecast calling for a short of ATVI near $53.50 proved spot-on with bulls failing to put up any type of fight and shares falling by an additional 25% at their recent low in mid-February. But despite an overall and unusually large correction of 53% since early October, I still see no reason to fight a friendly looking bearish trend. In fact, I see a short entry. ATVI Stock TradeIn this strategist's view, if ATVI stock trades beneath last week's doji low of $41, shares will be in position for shorting. Currently, Activision stock is trading in a two-plus week inside consolidation pattern within a larger doji. A move through $41 should serve as an early entry for a continuation trade and breakdown to new lows.For money management, if ATVI does signal a short entry I'd use $43.65 as a stop-loss. That amounts to manageable exposure of around 6.5%. It also serves to smartly (maybe) exit the position 1% above last week's doji high in the event we're overestimating Activision's bearish downside potential.On the downside, the first level of potential support is near $38.50, which maintains the 62% retracement level from ATVI's November 2012 corrective low. However, I wouldn't be too quick to take profits.With stochastics just turning lower, I believe ATVI stock bears will be gunning for $32.50 — $35. That area holds 2000's 62% Fibonacci level and weekly Bollinger band support. And given ATVI's current bearish tendencies, that price zone looks a good deal more technically compelling with regards to a meaningful low and maybe a grand finale where today's bearish trend might be completed.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Blue-Chip Stocks That Will Lose You Money * 7 Cheap Stocks Under $5 That Could Soar * 7 Stocks Under $10 You Shouldn't Buy Compare Brokers The post Itas Still aGame Ona for Activision Bears appeared first on InvestorPlace.
Is EA the Gaming Stock to Buy Now?
Wed, 06 Mar 2019 12:30:19 +0000
Investorplace contributor Josh Enomoto recently highlighted the seven best video game stocks to power up your portfolio. Naturally, Electronic Arts (NASDAQ:EA) and EA stock were one of them. Source: Electronic ArtsInvestorPlace – Stock Market News, Stock Advice & Trading TipsEnomoto knows a thing or two about this subject, having worked for Sony (NYSE:SNE) for several years in the past. His take on tech stocks is worth reading. So, before I get into the reasons why I think EA stock is worthy of your consideration, let's see what Josh had to say about the maker of Battlefield V. amongst others. "Within the development and publishing sphere, very few names have achieved the far-reaching success of Electronic Arts (NASDAQ:EA)," my colleague wrote on February 12. "However, no one also knows how to shoot themselves in the foot like EA. After dominating most other video game stocks, EA came crashing down due to their own hubris." * Why NOW Is the Time to Buy Gene Therapy Stocks The hubris in question: releasing Battlefield V before it was ready for prime-time game playing. Nothing hurts a stock more than failing to live up to customer expectations. Down went EA stock on the news initial Battlefield V sales weren't going to be near as robust as initially thought. Through the beginning of February, Battlefield V sold 7.3 million copies in the two months since its launch, one million less than company expectations. The good news is that EA has additions and adjustments coming that will drastically improve the gaming experience, and that's key to moving copies of the game. As Enomoto stated, it would be a mistake to think that EA won't learn from its Battlefield V misstep. I couldn't agree more. Why I Like EA StockI'll be honest. I am not a gamer. Never have been. Never will be. So, when I read an article in Barron's about how amazing Apex Legends is, Electronic Arts' new free-to-play video game, paint me skeptical. I care about revenues, cash flow, profits, and delivering a business model that's got some staying power. However, I do know from writing about Activision Blizzard (NASDAQ:ATVI) February 14, that Apex Legends is cutting into the sales of Activision's top titles, so EA must be doing something right.Furthermore, juxtaposed beside its awful launch of Battlefield V, Apex Legends' stealthlike launch February 4 appears to be a brilliant move in a segment of the video game market (free to play) that's getting more important to publishers with every passing day. "With little warning and nearly no leaks, 'Apex Legends' was announced and launched on February 4 for Xbox One, PlayStation 4, and PC," wrote Business Insider's Ben Gilbert February 15. "It's impossible to overstate how rare that is, especially from major game publishers like Electronic Arts. That the game also turned out to be a free-to-play shooter from the talented folks behind 'Call of Duty' and 'Titanfall' is even more of a surprise."Which leads me back to what Josh Enomoto said about EA learning from its mistakes. CEO Andrew Wilson and his team did. The Bottom Line on EA StockAs a result, I don't see why EA's revenues and earnings won't keep going higher in the next few quarters. Only one analyst out of 24 has a "sell" or "underweight" rating, which is something to keep in mind. * 7 Chinese Stocks to Buy for the 2019 Rebound With a valuation that's not expensive relative to its peers, I don't see why EA stock can't move well into triple digits as we move into spring and summer. As of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Big Data Stocks That Deserve a Closer Look * 7 Best Energy Funds to Outperform the Market * 5 Blue-Chip Stocks Ready to Rise Compare Brokers The post Is EA the Gaming Stock to Buy Now? appeared first on InvestorPlace.
3 Small- to Mid-Cap Video Game Stocks to Buy
Tue, 05 Mar 2019 19:40:32 +0000
The video game industry has been in a strange place since the release of Player Unknown's Battlegrounds in March 2017. Whenever an industry-wide step change takes place, it's almost always driven by a fear of missing out, or "FOMO." With PUBG, the gaming industry found "battle royale," its biggest genre hit since Minecraft. But amid all the battle royale madness, there are still appealing video game stocks to buy that don't rely on new titles within the BR genre for impressive gains.Investors just aren't paying much attention to them. And understandably so.The battle royale genre, which was popularized by Fortnite shortly after PUBG's release, has sent developers tripping over themselves to make the definitive BR title, and it has caused investors to take cash out of any video game investment threatened by Fortnite's dominance. Now, the copycats are here, and Electronic Arts (NASDAQ:EA) is up 22% so far in 2019, as it's the publisher behind trendy new battle royale contender Apex Legends.InvestorPlace – Stock Market News, Stock Advice & Trading TipsBut, as is characteristic of any "FOMO" play, the mere-exposure effect tends to lead gamers, developers and investors to all drink from the same pool of water. That is, the more popular a thing is, and the more we are exposed to that thing, the more we gravitate toward it, unconsciously or not. * 7 Chinese Stocks to Buy for the 2019 Rebound For investors, this is particularly disconcerting, as it means chasing areas of investment that have already peaked rather than making sound decisions for our long-term financial health. Think bitcoin. In response, I've put together this short, but vital, list of small- and mid-cap video game stocks that may have been overlooked. Each of these gaming stocks has a strong catalyst independent of the Fortnite/battle royale hysteria. Sea Ltd (SE): Battle Royale Meets eBaySource: Shutterstock You may not have heard of it, but Sea Ltd (NYSE:SE), the parent company of Garena, is responsible for the original mobile battle royale game, Free Fire, released around the same time as PUBG. As Garena's first in-house title, Free Fire has proven itself a monster hit. In fact, as of SE stock's most recent quarterly earnings statement, FF sports more than 350 million registered users, of whom 40 million are daily active users (DAUs). What's more, Garena's relationship with Tencent (OTCMKTS:TCEHY) has allowed SE stock to benefit from global video game sensations, including League of Legends.But all of this is just one segment of Garena's parent company, Sea Limited. In addition to digital entertainment, SE benefits greatly from e-commerce and digital financial services. In fact, its e-commerce business, Shopee, generated $3.4 billion in gross merchandise volume (GMV) and $127 million in sales for Q4, a year-over-year increase of 1,262%!Considering the success SE has had in diversifying its business, it's no wonder SE stock has nearly doubled this year. With momentum like this, it's not unusual for bullish analysts to revise their price targets, which currently average out to $24.67. Take-Two Interactive (TTWO): Playing By Its Own RulesSource: Via RockstarAside from Red Dead Redemption 2's Make It Count mode, Take-Two Interactive's (NASDAQ:TTWO) entire portfolio is free of battle royale games.In fact, TTWO's entire publishing methodology goes against modern games development … rather than releasing big tentpole titles on an annual schedule, Take-Two spends years cultivating franchises. It's the opposite of rival EA, which releases a new Call of Duty game every year without fail. And it's this alternative approach that has made Take-Two one of the best video game stocks to buy for quite some time now.TTWO's formula works, as the newest Red Dead shipped more than 23 million copies to retailers, and Q3 revenue jumped to $1.25 billion from $481 million. Further, management increased its outlook for the full year, citing a "record year" for bookings and cash. Despite this, TTWO stock is down nearly 20% year-to-date as investors had more lofty expectations. * 7 Stocks Under $10 You Shouldn't Buy Considering it has one of the most sought-after gaming portfolios in the industry, and Take-Two stock is considered a buyout target from a Big Tech company like Microsoft (NASDAQ:MSFT) or Amazon (NASDAQ:AMZN), TTWO appears oversold. If it can get to the consensus price target of $124.06, that would represent a near-40% gain from its current perch. Not too shabby. Glu Mobile (GLUU): Freemium for AllSource: Shutterstock Unlike the other video game stocks on this list, Glu Mobile (NASDAQ:GLUU) focuses its efforts on the freemium model of mobile gaming. Its specialty is in celebrity endorsements (think Kim Kardashian, Brittany Spears, etc.). But its latest bout of high-profile branding comes from none other than Disney (NYSE:DIS).Glu Mobile currently holds a license to develop games based on Disney and Pixar characters. And Darla Anderson, producer of the hit film Coco, has joined the board of Glu Mobile to help steer it in the right direction. Disney Sorcerer's Arena will be the first title to come out of the licensing agreement, but far from the last.Its recent strategical pivot, in fact, has led Glu Mobile back to profitability. In its most recent quarter, GLUU posted a loss of 1 cent vs. a loss of 29 cents a year ago. Revenue, too, increased by roughly $15 million in the quarter. Still, GLUU shares plummeted as forecast bookings of $88 million to $90 million fell short of expectations for $93.5 million. Consequently, GLUU stock is off 8% since Feb. 5.With a robust mobile gaming market as its tailwind, GLUU stock can run much further if its partnership with Disney takes off. And this isn't a bad spot to buy.John Kilhefner is the Deputy Managing Editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Big Data Stocks That Deserve a Closer Look * 7 Best Energy Funds to Outperform the Market * 5 Blue-Chip Stocks Ready to Rise Compare Brokers The post 3 Small- to Mid-Cap Video Game Stocks to Buy appeared first on InvestorPlace.
EA’s Apex Legends May Be Retreating After a Hot Start
Tue, 05 Mar 2019 18:23:00 +0000
Fewer people seem to be watching streams of (EA)’ (EA) new battler Apex Legends since its hot start. In a Tuesday note, Cowen analyst Doug Creutz cited viewer data from (AMZN)-owned (AMZN) game streaming service Twitch by way of noting that initial enthusiasm for Apex Legends has dropped since its introduction last month while other games appear to be recovering. The Fortnite-targeting Apex Legends was a surprise launch from EA, and it was released just before its last quarterly financial results were announced.
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