UNPOPULAR REALISTIC OPINION ON UBISOFT - THE WORST IS BEHIND USIs Ubisoft the most hated stock on the market right now?
Both sentiment and price action seems to have gone in extremely negative territory. The herd seems to have chosen Ubisoft as this year's scapegoat for hate.
Nevertheless, a more realistic and positive outlook exists, for investors looking for value, Ubisoft now seems primed for UPSIDE. In this post I like to explain why.
Ubisoft dropped another 17% today as of writing this post, trading at 9.45 euros per share. This capitulation comes after the postponement of AC Shadows release, objectively speaking a solid and wise decision given the backlash about the pre-footage and allowing Ubisoft to make significant changes in making the release a success.
Technically speaking, Ubisoft is in a great value for money area :
- Monthly RSI sitting at oversold (never happened before)
- Mothly RSI making new lows, with price making higher lows (= hidden bullish divergence)
- UBI sitting slightly below the bottom support of it's historic upward price channel
-- A low that in my opinion can easily be reclaimed as support
- Monthly MACD bearish momentum weakening, signaling strength despite relentless bearish price action
- Lots of horizontal support close to current price (green horizontal lines)
- Blue line covers a scenario I see developing over the next few weeks (reclaim of bottom channel support - purple line; followed by reclaim of bottom falling wedge - black line), trade sideways and slightly up to eventually break bullish out of the falling wedge).
Additionally, and fundamentally speaking, investors seem to forget the massive catalog that Ubisoft has in terms of games, a catalog universally available for purchase, promoted by discounts making buyers tempted to stock up, that will always result in revenue, potentially being underestimated by the market. Earnings might not be so bad?
Fundamentally I believe Ubisoft is set for an epic comeback, one way or another, a management shift or a surprising good release or sales results of existing catalog could trigger a relief rally turning in continued upside. The bears have been in control for too long and are too confident it sure seems.
All opinions welcome; I'm not a financial advisor and am simply sharing my thoughts from an investor perspective. Thanks for reading!