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by Darius Anucauskas

Is Electronic Arts Stock Ready To Go Higher Again?

The stock of Electronic Arts Inc. (NASDAQ:EA)  moved slightly lower in the beginning of September, wiping out all of the gains made in July and August. But we can see that it started reversing back up a bit, as the probability of a possible second lockdown is rising again, which may be a positive for EA. Given that people could be forced to stay at home again, video games might be something that they would refer to for their leisure. Also, given that we are now in the pre-Christmas holiday period, game consoles and video games could be in high demand, which might make EA an attractive stock to own.

Looking at the technical picture of EA on our 4-hour chart, we can see that after finding support near the 123.00 mark on September 17th, the share price reversed north again and is now testing its resistance area near the 200 EMA and the 132.32 barrier. That barrier is marked near the low of July 24th and the high of September 23rd. At the same time, the stock is trading above its short-term tentative upside support line drawn from the low of September 18th. Although there is a good chance for EA to make its way higher, we would prefer to wait for a push above that 132.32 hurdle first, before examining higher levels. Hence our cautiously-bullish approach for now.

If the stock jumps over the 132.32 zone, this would confirm a forthcoming higher high and would also place EA above the 200 EMA, what some new buyers could see as a positive sign. The share price might then drift to the 135.50 obstacle, a break of which may open the way to the 138.00 level. That level is marked by the high of September 3rd.

The RSI and the MACD are currently flat, which supports the idea of standing pat for now. However, the overall upside scenario is backed by the fact that the RSI is above 50 and the MACD is above zero and its trigger line. The two oscillators indicate an upside price momentum.

Alternatively, if the share price breaks the aforementioned upside line and then drops below the 127.85 zone, marked by the low of September 23rd, that could increase the stock’s chances of a further decline. EA might then travel to the 126.65 obstacle, or to the 123.65 area, marked by the low of September 11th. The fall might get halted there initially, but if there are still no new takers of the stock at that price, the next possible target could be the 123.00 level, marked by the lowest point of September.

ElectronicArts-240

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