Quick Take Technical Analysis: Activision Blizzard, Inc

Activision Blizzard, Inc ATVI gapped down about 15% lower on Wednesday morning after the company printed its third-quarter results and a grim outlook for its FY 2021 earnings, where it expects net bookings to fall. Activision also postponed the release of two games.

• On Oct. 20, Activision Blizzard broke up bullishly from a head-and-shoulders pattern Benzinga called out on that date and ran almost 7% north over the following four trading days.
• The stock then began to fall slightly into its earnings print and confirmed a downtrend with a low created on Oct. 28 and a lower high printed on Nov. 1.
• On Wednesday, Activision Blizzard immediately dropped down to test the $64.53 level as support and bounced.
• Activision Blizzard’s volume was massive on Wednesday morning and within the first half hour of the trading session 11.55 million shares had already exchanged hands compared to the average 10-day volume of 8.3 million. The high volume indicates a high level of investor interest, and in this case the volume is bullish.
• If Activision Blizzard closes the trading day near its high-of-day it will print a hammer candlestick, which could indicate higher prices will come on Thursday. Thursday’s candle will need to print for confirmation the downtrend is over.
• There is now a large gap above between about $67.03 and $77.04, which is likely to be filled in the future.