Electronic Arts Stock is Losing Ground

by Darius Anucauskas
13:03, 2021/09/17

Looking at the technical picture of the Electronic Arts stock (NASDAQ: EA) on our daily chart, we can see that the price is forming lower highs, as it continues to trade below a medium-term downside resistance line taken from the high of January 25^th. The stock is now approaching one of its key support areas, at 134.84, which is the lowest point of August. Although there is a decent chance for EA to move further south, we will wait for a violation of that obstacle first, before getting comfortable with lower areas.

If, eventually, the share price drops below the 134.84 hurdle, this will confirm a forthcoming lower low, potentially opening the door to further declines. EA could then travel to the 132.48 zone, marked by the low of March 30^th, where a temporary hold-up may occur. However, if there are still not enough buyers at that price, the stock might continue sliding. That’s when we will aim for the 128.17 obstacle, or the 127.30 level, marked by the lows of March 25^th and 18^th respectively.

Both the RSI and the MACD are currently pointing lower. In addition to that, the RSI sits below 50 and the MACD had recently fallen below zero and continues to run below the trigger line. The two oscillators clearly indicate negative price momentum, which supports the scenario mentioned above.

Alternatively, if the share price rises back above yesterday’s high, at 139.70, this may allow the stock to go for a larger correction higher. EA may then travel to the 141.80 obstacle, a break of which could set the stage for a test of the 143.91 hurdle, marked by the low of September 13^th. If that hurdle is just seen as a temporary pit-stop for the bulls, they might easily overcome that area and aim for the aforementioned downside line, which may provide resistance for the stock.

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