Later this week, Electronic Arts (EA) - Get Report will report its first-quarter results. Ahead of this big news, the stock has been moving steadily higher after retesting the June lows early this month. A major breakout followed EA's last earnings report. Could another one be on the way?
EA bulls have been very quietly putting money to work this month. Three weeks after the company's last post-earnings breakout gap, which launched the stock over 12%, EA reached extremely overbought levels and was in need of a consolidation. The stock worked through a rather volatile pattern beginning in early June but the action turned much more positive at the start of July. Since the July lows, which held major support near the $105.00 area, EA has rallied over 8% and appears headed for a breakout move.
Ahead of EA's Thursday afternoon earnings report, bullish investors should consider the stock a fairly low-risk buy. EA has a solid support zone in place between $113.00 and $111.00. On the downside, a close back below $108.00 would violate last week's low and would push the stock back into consolidation mode.
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