US Stock Focus: Electronic Arts rebounded from key major support

Medium-term technical outlook (1-3months) on Electronic Arts (EA)


Key technical elements

  • The recent 19% plunge seen in EA has managed to stall at a key major support of 99.60 which is the gapped up seen on 10 May 2017 and the lower boundary of the ascending channel in place since 08 Feb 2016.
  • The rebound from 99.60 key major support indicates that the on-going primary (multi-month) uptrend remains intact coupled with other positive technical elements.
  • The daily RSI oscillator has continued to inch higher from a broken descending resistance in place since May 2017 and still has room for further potential upside before it reaches an extreme overbought level of 94%.
  • Volume has started to increase and yesterday’ volume is higher versus the average of the previous 3 days. Observations from the daily RSI and volume have indicated that medium-term upside momentum of price action has resurfaced.
  • The key medium-term support rests at 109.47 which is defined by the former swing high areas of 27 Nov/18 Dec 2017 and 61.8% Fibonacci retracement of the current up move from 28 Dec 2017 low to yesterday, 18 Jan 2018 high.

Key levels (1 to 3 months)

Pivot (key support): 109.47

Resistances: 122.79 & 132.65

Next support: 99.60

Conclusion

Therefore, Electronic Arts (EA) is likely to have resume its medium-term bullish impulsive upleg. As long as the 109.47 key medium-term pivotal support holds, EA may see a further push up to retest its current all-time high at 122.79 before targeting the next significant resistance at 132.65 (upper boundary of the ascending channel from 08 Feb 2016 & 1.00 Fibonacci projection of the up move from 08 Feb 2016 low to 30 Sep 2016 high projected from 05 Dec 2017.

On the other hand, failure to hold above 109.47 should negate the preferred bullish tone to see a slide back to retest the 99.60 major support.

Chart is from eSignal 


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