The digital interactive entertainment company Electronic Arts Inc. (EA) is close to a fresh upside breakout. Prices sold off from January to the middle of March but have rebounded and last month they made new highs for the move up.
Is this the time to go long or add to longs or do we need more time? Let's check the charts.
In the daily bar chart of EA, below, we can see that prices have been in a sideways consolidation pattern the past few weeks. Prices are above the rising 50-day moving average line and the rising 200-day moving average line.
Though prices turned down from January the daily On-Balance-Volume (OBV) line only declined in February and much of March. The line has improved slightly from late March but it has a long way to go to get back to its previous high.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line which is a good signal but recently this trend-following indicator has crossed to a take profits sell message.
Bottom-line strategy: Sometimes it is hard to wait for a breakout. We like to see stocks move immediately, if not sooner. EA looks ready for new highs but traders should wait for a trade at $120 before going long. Risk below $10. The first price target is $134.