Let the Games Begin

Electronic Arts(ERTS Quote) is 28.6% overvalued with fair value at $45.17. The weekly chart profile is positive and the five-week MMA stands at $58.13. With this company another potential beneficiary of the Xbox popularity, traders that can take the risk could ride the stock to my semiannual risky levels at $60.38 and $61.86. I would become concerned that the momentum was ending on a weekly close below my annual pivot at $57.33. Shares were recently trading at $56.81.

Activision(ATVI Quote) is 19.6% overvalued with fair value at $11.88. The weekly chart profile is negative with the five-week MMA at $15.72. On Nov. 22, Bear Stearns warned that two of the company's recently released games -- Gun and True Crime -- have not sold as well as expected. Shares are below my quarterly pivot at $14.52, which indicates downside risk to my semiannual value level at $12.66. If shares stabilize and there's a weekly close above $14.52, look for a trade up to my quarterly risky level at $17.29. Shares were recently trading at $13.99.