As U.S. indices hit all-time highs, you probably don’t want to look at stocks that are also trading at or near their all-time highs. Instead, you might want to discover names that are far from their all-time highs but are showing signs of bullishness. It’s actually even better if you can find fundamentally sound equities that have gone through a significant correction and are now turning the corner as the overall sentiment shifts to optimism.
We’ve gone through many of the stocks in Nasdaq and discovered three securities that seem to fit the bill. Here are three hot gaming stocks that could be ready to soar soon.
After posting an all-time high of $151.26 in July 2018, Electronic Arts (EA) went into a brutal correction that saw the stock plunge to lows of $73.91 in December 2018. That’s a loss of over 51 percent in as little as five months.
At that point, the fortunes of the stock reversed. It appears that bulls were ready to take back control.
A look at the weekly chart shows that the stock is forming an ascending triangle as bulls attempt to overwhelm resistance of $100. So far, the supply area has been tapped twice over a five-month period. We believe the next rally could pierce the resistance for good.
If you’re considering to long EA, you might want to do so once it takes out $100 and converts it to support. Targets are $125 first and $150 next.
Just like EA, ATVI has been crushed after posting an all-time high of $84.68 in October 2018. It nosedived all the way down to $39.85 in February 2019. In four months, this gaming stock was devalued by a brutal 52.94%.
Nevertheless, ATVI looks poised to reverse its bearish trend.
The weekly chart reveals that ATVI bulls are working hard to regain market control by painting an inverse head-and-shoulders pattern. The neckline of the pattern rests at $50. Thus, a move above this level could launch the stock into a bull run.
For ATVI, traders might want to buy once the stock pierces $50 and retests it as support. Targets are $65 and $80.
NVDA is in the same boat as the other gaming stocks above in the sense that it has been pummeled after printing an all-time high of $292.76 in October 2018. The stock slid by over 57 percent when it crashed to $124.46 in just two months.
The good news is that the stock appears to have stopped the bleeding when it built durable support at $133. An analysis of the weekly chart shows that bulls are painting a double bottom pattern with a neckline at $190. With support firmly established at $133, bulls are working hard to drive the price beyond resistance of $190.
If you’re looking to buy shares, you might want to do so when NVDA rises above $190. The breakout could trigger a massive rally to resistance of $285.
U.S. indices are recording fresh all-time highs, and many retail traders are lured to buy securities that are trading close to the top. You might not want to hop on this bandwagon. Instead, consider looking for names that offer an attractive risk-to-reward ratio. Gaming stocks such as EA, ATVI, and NVDA have lost so much value that they could offer a lot of room for potential gains.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.
Last modified: September 23, 2020 12:49 PM