Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, personal computers, mobile phones, and tablets worldwide. It develops and publishes games primarily under the Battlefield, Mass Effect, Need for Speed, The Sims, and Plants v. Zombies brands; and license games from others, such as FIFA, Madden NFL, and Star Wars, as well as publishes and distributes games developed by third parties.
Take a look at the 1-year chart of Electronic Arts (NASDAQ: EA) with the added notations:
EA has bounced on top of its $105 support (green) a couple of times during the past couple of months. Now that the stock has started to roll back down towards that support again, traders should be able to expect some sort of bounce. However, if the $105 support level breaks, lower prices should follow.
Join our new Linkedin Group by clicking the link below:
The Tale of the Tape: EA has a key area of support at $105. A trader could enter a long position at $105 with a stop placed under the level. If the stock were to break below the support, a short position could be entered instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach