Looking to game this video game stock? Here’s your trade on Electronic Arts (EA). (January 30, 2018)
EA ATVI TTWO EA
I want to look at Electronic Arts ( NASDAQ: EA ). It is interesting, today I mentioned in the forum that this stock was kind of bumping right up against $120.00. I don’t have a position in this stock, I haven’t in quite a while. I wanted to mention that and if we look at the others, Activision ( NASDAQ: ATVI ) is doing well. Take-Two ( NASDAQ: TTWO ) is also doing well; they report in a week.
We look at Electronic Arts ( NASDAQ: EA ) and after the bell you can see that they have gapped up. If we look at where the stock is trading now, it is at 125.50; so let’s kind of craft a trade for tomorrow. If the stock gaps up here tomorrow, that is up almost 6 percent. That is a pretty big gap and there is no way I would be buying this at the open. I think, though, what you want to do is don’t just tacitly decide to short the stock. It is up above these three standard deviations bands, which means by definition it has got to revert to the mean.
When you see the stock open up tomorrow it is a real simple trade. You see where the stock is opening up, it will probably move higher for a bit, that’s fine, avoid it. Look at it on the 1-minute chart; once the stock starts to print a solid bar, in other words where the current price is lower than where it opened, that is when you look to start shorting the stock if you want to. But it would only be for a really quick trade because support here is at 120.00. So you wait for the stock to give you a first colored bar and then short the stock. Then keep your buy stop on it above the intraday high. In other words, the only way you would be stopped out is if the stock starts printing new highs.
Now, here is the other thing though. If that trade doesn’t present itself and instead the stock just starts moving higher, well then forget about shorting it, go ahead and buy the stock and keep a stop below the low, the intraday low. It is kind of like be a Jiu-Jitsu guy, whichever way the stock is going you go that way too. Your exit, your, “Oh crap I’m wrong” exit is just outside wherever the intraday range is tomorrow morning. Try that on Electronic Arts ( NASDAQ: EA ), I will be talking about it in the forum. I will wind up making that trade similar to the one I did on Wynn ( NASDAQ: WYNN ) this morning.
Free Chart