Get in the Game With Electronic Arts
- Posted by Greg Harmon
- on October 22nd, 2013
Electronic Arts, $EA, is known for their sports video games and tag line. But the stock chart is worth looking at. The daily chart below shows the stock rolling over into mid August but building a consolidation through the last 2 weeks. This is where to focus. After holding under the 100 day Simple Moving Average (SMA) and well below the 20 day SMA, it broke both and closed above them. The close was also at a key 25.25 level. It looks good to the upside if it can hold above the blue line. but it gets more interesting when you look at the turn in momentum. The MACD at the bottom of the chart is turning back higher and the RSI at the top is also bottoming and turning up.
The weekly candle also gives some hope for the upside turn around. After a brief pullback to just under the 20 week SMA it has consolidated for 3 weeks. The 20 week SMA has bee important support the entire ride higher since September. But a close examination of those consolidating candles shows bottoming tails. The MACD is still headed lower but the RSI is in for a potential Positive RSI Reversal. With the lower low in the RSI corresponding to a higher low in the price, this targets a move higher to 30.70 (pink) in the stock. But there is also a Cup and Handle pattern forming. This pattern calls for a target of 41.09 (green). And it all starts with a move over 25.25. Stay tuned.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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