Activision Blizzard (ATVI) reported strong earnings and is popping after hours. Here is your level for support. (May 05, 2016)
In this Free Chart video I want to look at Activision ( NASDAQ:ATVI ). The company reported earnings that totally beat the estimates. The stock is trading in between these two hash marks here, up over 5 percent, in the after hours. What are we going to do? I don’t like to chase stocks that gap up on this kind of stuff. Sometimes it works, but most of the time it doesn’t. You would actually be better off selling into this stuff. I’m not really going to make an exception here with Activision ( NASDAQ:ATVI ). I will just say that their guidance for Q2 was strong. They’re in a good industry, video games, all that kind of stuff, so they’re in a good industry. This stock could continue to move higher from here. But this is what I would want to see: I think this stock will probably trade down a bit in the morning, we don’t know for sure based on the possibilities for what the jobs numbers is going to be for April. But typically you see a stock that trades up like this is probably going to pullback a bit.
You have to look at the $36.00 level. If the stock pulls back and the $36.00 level holds, then this is a stock that you can buy. But you look at the weekly chart, and you see a whole lot of mush here. So I’m looking at an upside of about 40.00, I doubt it’s going to go down here, but the upside is really about 40.00 on this. This is your upside target, it’s got to hold above 36.00 and I think you’re good to go. But don’t be buying first thing in the morning. It’s not going to be in a short squeeze, it’s not that heavy of short interest. If the stock doesn’t hold above 36.00, then this is what I want you to consider doing: Watch the stock. If the market’s weak, the stock trades down say close to the 50-day moving average, then that’s a level you can buy this stock, but you have to have a long-term view of the trade. I shouldn’t even say a trade of the position, it’s not a trading stock. You look for a 36.00 bottom in order to buy it, otherwise, stand aside.
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