Will Electronic Arts Inc breakout?

Electronic Arts Inc (NASDAQ:EA) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:EA.

Zooming in on the technicals.

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Taking everything into account, EA scores 7 out of 10 in our technical rating. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, EA is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• EA is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so EA is lagging the market slightly.
• In the last month EA has a been trading in the 138.64 - 147.76 range, which is quite wide. It is currently trading near the high of this range.
• When compared to the yearly performance of all other stocks, EA outperforms 43% of them, which is more or less in line with the market.
• EA is part of the Entertainment industry. There are 70 other stocks in this industry, EA did better than 61% of them.

How do we evaluate the setup for NASDAQ:EA?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:EA this score is currently 9:

Besides having an excellent technical rating, EA also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 146.3. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 145.04, a stop order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

How to trade NASDAQ:EA?

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Our Breakout analyzer lists more breakout setups and is updated daily.