EA Electronic Arts - Still Bullish or Not?
Updated
Hi guys welcome. Ive been keeping tabs on this after certain observations made me think it was a potential trade and thus am currently in a swing position. This is by no means financial advice. I try to look at the bigger picture in anything i chart keeping a flexable stance. I play both sides of the field and can change my strategy to meet the demands of the trend and to manage risk.
* warning- this may be long winded*
Analysis was done on the Daily timeframe.
I was initially feeling like the 109-112 area was a solid buy zone. The move up past $113 really was adding confidence. However we topped around $114 and soon gave up all our gains. It did make me lose some confidence, since i like to see confident, swift moves in terms of how the candles are shaped. You generally want big green bodies for atleast couple days. We had an average sized candle on March 2nd, then switched to small bodied candles with upper wicks which shows a slow down in momentum and selling pressure. ALso note we got some big bearish candles thursday and friday, we dont want that to continue.
That being said, i still believe until proven otherwise that my analysis in my previous ideas for EA is intact. I did have to adjust my downward trend channel a bit, but we are still currently in this. We are also below the red horizontal support line that stems back to April 2020 but we havent really confirmed below it. The bullish divergence seen in the 3 indicators, RSI, MACD and Money Flow is also intact.
As you can see, by the white trend lines drawn on the indicators, we still have not broken this pattern. Which gives points to the bullish case. As playing out a bullish divergence, can push up price for decent gains. Just note, i unfortunately don't have a crystal ball and cant say for certain that this plays out. TO protect this we need to stay at these levels moving sideways and or continue our uptrend.
Being below the red support line, does make me nervous. What we do have to keep at eye out is Weekly timeframe confirmation below this especially keeping an eye out on the next 2 weeks.
Pay attention also to current price action, we are currently testing support again at the lower line of the downward sloping trend channel. I would love to see a bounce off this to gain back confidence. Bigger candle bodies are ideal but at this point anything works as long as it looks like we are consolidating sideways at the very least.
Also pay attention to the Bollinger Bands (BB). We are in a tightening range, normally a tightening range indicates the "calm before the storm". Things can pop off to the upside or downside. HOwever for EA, we are actually slightly closed below it, which also worries me. Our next daily candle needs to stay above the lower band of the Bollinger Bands and above the downward trend channel. If we cant, we can also be going down lower. Next support range would be maybe the $102-$98 area indicated by green horizontal line/box.
ALso note that our short lived move to 114$ was pushed down by the upper band of BB on MArch 06 as noted by the upper wick of that candle. ALso on friday the 10th of March, we were pushed down by the Orange median line of the BB indicating resistance. I would like to see this move above the Orange line ASAP. We want to avoid candle prints outside of the BB, as it would indicate selling pressure. BB can be a nice tool as price reacts well with the bands.
Overall the price action still looks like price consolidation, and if i may be bold here kinda bullish consolidation. Especially if we dont print any crazy bearish confirmations going forward.
Price printed a lower low on friday. WHILE indicators hold a higher low.
WE have to, have to! hold this pattern. If you see the indicators crash below the trend lines, and wipe out the higher lows, we may continue to sell off and may need indicators to cool off into the oversold areas.
Put also special attention on the ADX indicator. Here notice how the red is over the green line but it forming a lower high. This could mean we are losing bearish momentum and maybe moving towards bullish momentum or when green goes over red. Also expect some ADX chop which is basically what i describe (and if you look back at history) when theres multiple overlaps between red & green with low heighted peaks for both colors. Normally happens when massive moves occur to either the upside or downside, in this case downside ofcourse. So pay attention to that as well.
So in conclusion: i would say we are still bullish or i am in my opinion expecting a move to the upside until proven otherwise. Next week overall will be important to observe. Watch the current price action interaction with lower border of downward trend channel and the lower band of BB.
Hope this helped. Check out my other charts on EA to get the bigger picture. Expect more updates. Please boost, comment and follow for more charts like this.
DIsclaimer: This is NOT financial advice. The ideas expressed here are my opinion and for educational purposes. Thank You
* warning- this may be long winded*
Analysis was done on the Daily timeframe.
I was initially feeling like the 109-112 area was a solid buy zone. The move up past $113 really was adding confidence. However we topped around $114 and soon gave up all our gains. It did make me lose some confidence, since i like to see confident, swift moves in terms of how the candles are shaped. You generally want big green bodies for atleast couple days. We had an average sized candle on March 2nd, then switched to small bodied candles with upper wicks which shows a slow down in momentum and selling pressure. ALso note we got some big bearish candles thursday and friday, we dont want that to continue.
That being said, i still believe until proven otherwise that my analysis in my previous ideas for EA is intact. I did have to adjust my downward trend channel a bit, but we are still currently in this. We are also below the red horizontal support line that stems back to April 2020 but we havent really confirmed below it. The bullish divergence seen in the 3 indicators, RSI, MACD and Money Flow is also intact.
As you can see, by the white trend lines drawn on the indicators, we still have not broken this pattern. Which gives points to the bullish case. As playing out a bullish divergence, can push up price for decent gains. Just note, i unfortunately don't have a crystal ball and cant say for certain that this plays out. TO protect this we need to stay at these levels moving sideways and or continue our uptrend.
Being below the red support line, does make me nervous. What we do have to keep at eye out is Weekly timeframe confirmation below this especially keeping an eye out on the next 2 weeks.
Pay attention also to current price action, we are currently testing support again at the lower line of the downward sloping trend channel. I would love to see a bounce off this to gain back confidence. Bigger candle bodies are ideal but at this point anything works as long as it looks like we are consolidating sideways at the very least.
Also pay attention to the Bollinger Bands (BB). We are in a tightening range, normally a tightening range indicates the "calm before the storm". Things can pop off to the upside or downside. HOwever for EA, we are actually slightly closed below it, which also worries me. Our next daily candle needs to stay above the lower band of the Bollinger Bands and above the downward trend channel. If we cant, we can also be going down lower. Next support range would be maybe the $102-$98 area indicated by green horizontal line/box.
ALso note that our short lived move to 114$ was pushed down by the upper band of BB on MArch 06 as noted by the upper wick of that candle. ALso on friday the 10th of March, we were pushed down by the Orange median line of the BB indicating resistance. I would like to see this move above the Orange line ASAP. We want to avoid candle prints outside of the BB, as it would indicate selling pressure. BB can be a nice tool as price reacts well with the bands.
Overall the price action still looks like price consolidation, and if i may be bold here kinda bullish consolidation. Especially if we dont print any crazy bearish confirmations going forward.
Price printed a lower low on friday. WHILE indicators hold a higher low.
WE have to, have to! hold this pattern. If you see the indicators crash below the trend lines, and wipe out the higher lows, we may continue to sell off and may need indicators to cool off into the oversold areas.
Put also special attention on the ADX indicator. Here notice how the red is over the green line but it forming a lower high. This could mean we are losing bearish momentum and maybe moving towards bullish momentum or when green goes over red. Also expect some ADX chop which is basically what i describe (and if you look back at history) when theres multiple overlaps between red & green with low heighted peaks for both colors. Normally happens when massive moves occur to either the upside or downside, in this case downside ofcourse. So pay attention to that as well.
So in conclusion: i would say we are still bullish or i am in my opinion expecting a move to the upside until proven otherwise. Next week overall will be important to observe. Watch the current price action interaction with lower border of downward trend channel and the lower band of BB.
Hope this helped. Check out my other charts on EA to get the bigger picture. Expect more updates. Please boost, comment and follow for more charts like this.
DIsclaimer: This is NOT financial advice. The ideas expressed here are my opinion and for educational purposes. Thank You
Note
***PLEASE NOTE: I think for me to be 100% CONFIDENT on BULLISHNESS on this, i need to see price action CONFIRM above the Upper White Trend Line of the downward trend channel.Note
UPDATE 4:30pm 03-13-23- WE bounced off the lower end of the downward trend channel. We closed todays candle as a spinning top candle which is NOT a confirmation candle. We are still in play. I would feel alot better being above the red major support line.
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