Zynga (ZNGA) is showing traders the same outlook right now -- its price action is just a little more developed. Zynga went parabolic at the start of 2013, rallying extremely hard as buyers swarmed shares, but that uptrend broke in February, and shares have been tracking lower ever since. Now, as ZNGA hits its head on trendline resistance, it makes sense to sell the bounce lower.
You don't have to be an expert technical analyst to figure out what's going on in Zynga -- this social gaming stock has hit its head on that same resistance line three times now. The glut of selling pressure at resistance has done a good job of swatting down shares on Zynga's previous tests of that level. And while trendlines do eventually fail, this stock hasn't done anything to suggest that's the case at this point.If ZNGA bounces lower from here, shorts should look to take this trade all the way down to trendline support.
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