EA: Weak Fundamentals / Approaching Climactic of Distribution

- Fundamentally stock looks weak and will probably get weaker as covid comes to an end people will go out and play
- Technicals (MACD and Relative Strength) are weak as well
- Looks to be (over) priced upward for the recent relative deals (comps that got acquired - MSFT -> Activision)
- Still range bound - but sets up a target ~90 on the downside breakdown
- Catalyst will probably a new wave of general market weakness for the final breakdown

Comment:

Good idea to add on break - this will probably weaken further on general equity beta

Comment:

This came back a little, but shows little strength, especially relative to other tech names. Would add another layer or puts here.

Comment:

The back up came on a possibility of acquisition target for PE. I don't think this is going to happen - keeping the trade - aiming to keep it past earnings and into May (sell in may?)

Comment:

Trade is starting realize some decent PnL, at this point I suspect we will see some backing up action, now that we have cleanly broken through the bottom channel - on a very strong sale. This will probably be from month end rebalancing activity (month end salaries vesting into 401ks and the like) over the next couple of days. Earnings are coming up on the 05/10 and with the weakness across most tech I think these will also miss. Will see what the shares will do; the current game plan is I will be looking to close the position if it hits the $90 price target before or possible ride it on a trailing stop if it goes through $90 after earnings.

Comment:

Today is earnings and guidance seems pretty bad. Stock is holding after hours but will likely crater or remain flat based on management notes (in my opinion there is limited optimism around these numbers). Someone (probably a machine) swept down 5% on the earnings print in the after session. Q4 earnings themselves seem very reasonable.

Comment:

Market moved back up; analysts viewed the earnings call optimistic but I'm not sure why. They lowered guidance by a couple of percent, lost exclusivity on the FIFA franchise, and make their income predominately off these season games which are subscription based (in a time where everyone is cutting their NFLX subscription).

Cutting some of the position with profit, will cover the rest at a lesser profit if it breaches 124.82.