A small sell side firm reportedly cut their price target on Electronic Arts (EA) Monday to $150 per share from $154. This is a minor adjustment from a little known firm, Truist, but may be a subtle move to anticipate lower prices ahead from a fundamental adjustment. Let's check on the charts and indicators.
In this daily bar chart of EA, below, we see a mixed picture. We can see lower highs from June, August and November but a higher low from May to September. Prices are trading above the declining 200-day moving average line and the bottoming 50-day line. The On-Balance-Volume (OBV) line has been neutral since June so buyers and sellers appear to be in balance. The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero-line, but pointed down for a take-sell signal.
In this weekly Japanese candlestick chart of EA, below, we can see the bigger picture -- here prices have been "rolling over" for several months now. While prices are above the 40-week moving average line its slope is negative. The weekly OBV line shows us a long-term decline from early 2021. The MACD oscillator made a higher low in October, but is still below the zero-line and not in buy territory. A weekly close below $126 should turn the chart bearish.
In this daily Point and Figure chart of EA, below, we used a five box reversal filter. Here the chart shows us a price target in the $73 area.
In this second Point and Figure of EA, below, we used weekly price data and the same five box reversal filter. Here too we can see the $73 price target.
Bottom line strategy: The price of EA could turn up or down, but in the short run the risk is lower and a close below $126 could increase the odds of further declines.
