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Betting on Electronic Arts

Natalya Malykh, Leading Analyst, Global Markets (Finam)

We recommend the shares of American video game developer Electronic Arts (ISIN: US2855121099) as a mid-term BUY. After a long downturn the stock has reached a solid support level and trade volumes do not point to serious intentions on the part of the bears. We’d like to note that a wedge, a reverse pattern, has haped up on the weekly chart and if the stock breaks out of the descending line to the downside this could send a reversal signal:

Weekly chart of Electronic Arts shares.

Source: Reuters

Given the close proximity to the support level (USD 15-16) and the wedge, the stock will hopefully stabilize and the trend will switch directions. In this case, we believe the stock will reach USD 20.00 within six months.