Stock Analysis ($ATVI): Why it felt 10% today and how far it will go?
Hello Steemian traders! Hope you guys are having an amazing day! Today, I'm going to analyse Activision Inc. stock. It's a $42.88 Billion market cap with 753.64 Million shares of public float. This company acts mainly in the gaming industry and their main activity is the development and distribution of content and services to game consoles, PC and mobile devices.
Fundamental Analysis
Today, Actvion Inc. shares dropped 10% after the earnings report due to a decline in active users, as stated by CNBC. The number of active users declined from 352 million to 345 million: a decrease of 1.99%. Although, the 'earnings numbers' are in line with the estimates: the company reported 52 cents a share in profits (with estimates of 50 cents a share) and the reported revenue was 'in line' with estimates: $1.66 Billion. Also, the company launched 2 video games in the 3rd quater and will launch "Diablo Immortal" in 2019.
So, my conclusion is: the company is still showing signs of strength and expansion, though the problem was a small 'bounce' on active users , which is the most likely reason why the shares dropped so much.
Technical Analysis
I had to pull up the weekly chart and draw Fibonacci retracements to look for confluence zones. Today's gap went through the 2nd confluence level (from bottom to top) at 56,37 - 56,90 and the confluence zone ahead is 49,80 - 50,36. This is where I believe the price will find support before bouncing back up. Also, look at the RSI: is testing a long-term support area and that's another reason why I think the stock will rise.
Although this drop will atract dip buyers and in the next few days we might test the 2nd confluence zone I refered before: the top yellow line you see in the image below. But the stock will probably drop very soon to the bottom yellow line at 50,36. Let's see what happens.
As I write this, I don't own any securities mentioned above. Read my Disclosure.
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Are you sure the 10% drop had nothing to do with the diablo announcement?
I cannot guarantee you that but there are articles that say it was due to the earnings miss
https://www.marketwatch.com/story/activision-stock-falls-8-after-earnings-miss-2018-11-08
And other sources say it was due to annoucement of diabblo
https://jogos.uol.com.br/ultimas-noticias/2018/11/06/acoes-da-activision-blizzard-caem-apos-anuncio-de-diablo-immortal.htm
The earnings miss is enough to get a huge drop on the stock price, but the announcement might have an effect on that. Also, Notice that both news were realesed before the market open on the 9th of November.
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