Stock Trading Predictions & Technical Analysis: ATVI

Tuesday, January 26, 2010

ATVI - Very Bearish

ATVI - WAIT

Although ATVI is in very oversold territory based on the stochastic, it could move much lower from here. The fact is that ATVI has been in a major down trend since June-July. ATVI has constantly broken through the lower bollinger band in recent days which is accelerating the move down. ATVI does have support at $10.00, however it does have a strong potential to move even lower from here. ATVI's next support levels are at $9.30, $8.75 and $8.15. In mid-December ATVI's 50 day MA crossed down through its 200 day MA, which is never a good sign. Looking at ATVI's chart, I can only see negative signals and signs that ATVI may still move much lower. Fibonacci Retracement Levels indicates that a move below $10.00 for ATVI should send it back towards $8.15. This scenario is even more likely if the market continues lower into a correction as I expect. Wilder's DMI ADX also indicates that the negative momentum is still much stronger than the positive (+DI 33.85 vs. -DI 10.89). I would strongly advise against taking any long position with ATVI. Buying at this point would be trying to catch a bottom, and you never want to go against the major trend. Based on current levels, ATVI could possibly give us a BUY SIGNAL when it moves back above $11.00 and back up over its 50 day MA. However, I don't see this happening any time soon. Based on the RSI, we could see a short term bounce back up from ATVI, however it would still be trending in a major down trend.

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.