The stock Activision has sold off over the past month from around $84 down to $51. ATVI is the company who owns Blizzard and is best known for the king of all MMORPG’s “World of Warcraft.”
This selloff in Activision has provided us with a great opportunity to make an extremely nice profit with the potential it holds. Even if the price goes down from the current level you can still get in even better. The exit will not move as I will explain in this post. If there are any other stocks, Forex, futures, or cryptos you would like for me to review then let me know and I will be glad to do so.
Calling All Gamers
From the chart above you can see how Activision (ATVI) has sold off over the past month. The market has been pulling back a bit which has contributed to Activision’s stock decline. But the main issue was their Q3 sales because revenue declined 13% and the growth wasn’t there. The new Diablo Immortal was unveiled to be a mobile-based game rather than for the PC. This made the fans of the franchise extremely upset. The announcement of the game is one of the most talked-about announcements due to how poorly the idea was received.
Sell-Offs Are Our Friend
Sell-offs provide us with great opportunities to make very profitable trades and Activision (ATVI) has provided just that. We don’t know when the downtrend will end. Since price has decreased so far without enough of a pullback that would complete the trade then we have a setup for huge profit potential.
Right now price is around 51.08. The exit will be 71.60 that is just under the grey box and is highlighted with the magenta line. I like to always have my exits a little bit before the level that completes the trade. This ensures I get filled because I have seen touch the exit level exactly and then retrace. If I had my exit exactly at the exit level then there is a good chance I would not have been able to get out.
The hard exit is at $72.40 so getting out at $71.60 should be plenty of wiggle room. So if you get in now at $51.06 then you could potentially make over $20 per share on this trade.
Could the Stock Price of Activision Go Lower?
Yes, it absolutely could but your exit does not move. Leave it at $71.60. You can get out anytime you want but if the move goes against you don’t panic. I am using a 1-hour timeframe for each bar on the chart. These types of time-frame trades using 1-hour charts can take 1 day to 6 months to complete.
Right now price is hitting off of the 161.8% Fibonacci extension level. Price could definitely go lower though so if you do get in now then my next target for entry would be around the 200% Fib extension level which is $44.36. If the price goes lower don’t panic, it happens and it is how I trade.
Just set your exit at $71.60 and go do something else. If price continues to go lower then you can continue to add to your position. Eventually, the price will rise back up.
Conclusion on Activision (ATVI)
The trade setup used here is my Lightning Trade setup. As I mentioned in my Apple (AAPL) post (https://evancarthey.com/why-did-i-take-a-sweet-bite-out-of-apple-aapl-today/) it is my favorite trade setup and the one I am primarily using right now. Activision (ATVI) has sold off a ton so it has provided an amazing opportunity to go long.
Price is currently at $51.06 and the exit would be $71.60. The exit does not move even if the price of Activision’s stock continues to go down. This trade can take months to complete so keep that in mind. If you are looking for a quick scalp then this trade isn’t for you.
If you really want to try to maximize your profits you could look into call options.
Options are still a product I am learning so I cannot give advice on what I would recommend. But if you have used options successfully and understand them then it could be something to consider to increase your profits even more from this trade.
Popular Links
Here are a couple of links if you are looking at how I view the market and some trade setups. You can create your own trading style and setups. Quit paying losing traders to teach you. The only thing they teach is how to lose money.
My Robinhood Shameless Plug
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My Robinhood Review: https://evancarthey.com/review-robinhood-trading-service-with-no-fees-part-1/
