Conclusion, Investment Implications, Strategy

Electronic Arts (EA) is amid favorable conditions to resume its November 2018 breakout from a year of sideways investor indecision.  A sustained rise above the $106.60 area would help confirm this and target an additional 19% rise to $130.00 per share.  This is an Asbury Momentum idea.

Analysis and Rationale

Electronic Arts Inc.(EA) develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. The company develops and publishes games and services across various genres, such as sports, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Anthem, Need for Speed, and Plants v. Zombies brands; and license games, including FIFA, Madden NFL, and Star Wars brands. It also provides advertising services; licenses its games to third parties to distribute and host its games. The company markets and sells its games and services through digital distribution channels, as well as through retail channels, such as mass market retailers, electronics specialty stores, and game software specialty stores. Electronic Arts Inc. was founded in 1982 and is headquartered in Redwood City, California.

Chart 1 below plots EA daily since late 2018 along with its 200-day and 50-day moving averages, the latter widely-watched major and minor trend proxies.  The chart shows that EA is currently rebounding higher from a Feb 3rd test of its 50-day MA at $106.60.  This is where the current November 2018 breakout higher from almost a year of sideways investor indecision should resume, IF still valid and intact. A sustained rise above the $106.60 area would help confirm this and target an additional 19% rise to $130.00 per share.

Chart 1

Table 1 below shows that, considering the aforementioned upside target and a protective stop placed below the $104.40 area, a long entry price of $109.71 would provide a 1:3.8 risk/reward ratio (risking $1.00 to make $3.80) with an initial risk of 4.8%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.