Analysts on Thursday highlighted three “mega trends” over the past decade: digital distribution, in-game purchases and blockbuster franchises such as Activision’s World of Warcraft and Take-Two’s Grand Theft Auto.
But, although markets have hit record highs, those stocks are still far from their highs reached earlier this year, with consumers stepping out of their homes and away from their consoles.
Look for long-term opportunities even in the face of short-term weakness, said Boris Schlossberg, managing director of currency strategy at BK Asset Management.
“In the short term, you’ve certainly had a huge demand for withdrawal from the pandemic, and everyone is now ready for some sun and air,” Schlossberg told CNBC.Trading nation“Thursday.” There’s probably going to be a natural comeback in inventory as the average play per hour per user is likely to go down. “
Electronic Arts is closest to its highs, down about 8% from January’s high. Take-Two is furthest away, nearly 19% below its February high.
“I actually think all three are good buys at this point as long as you have a long term lead time of, say, two to four years, especially with something like Take-Two.… The Grand Theft Auto franchise has it. already earned $ 10 billion, ”Schlossberg said. “The whole game industry momentum remains very, very bullish, it’s a long-term buy, and whatever downturn we’re going through right now, it’s just an opportunity to change. lengthen. “
Matt Maley, chief market strategist at Miller Tabak, is monitoring key levels of two of the stocks he sees as the most attractive – Activision and EA.
“Look at Activision first. The stock appears to be doing what you would call a double head and shoulders pattern. So if it breaks below the neck line, which is very close to its 200-day moving average. , it’s about $ 89… you want to step away from the stock and look for a point of re-entry at a lower level, ”Maley said during the same segment.
However, he sees this as strong support and unlikely to break, stressing that he has not fallen below his 200-day moving average, even during the lows of the Covid pandemic last year. Activision closed Thursday at $ 92.51.
As for EA, Maley said he was starting to slip below the lower end of an “ascending triangle pattern,” formed by a series of higher lows and a resistance level.
“It’s only a slight pause, and if it falls again, you might want to back off a bit. But, if you buy it on the weak as Boris suggests, don’t be afraid to add some. If and when it breaks above that $ 145- $ 150 range, it’s been really tough resistance, so once it breaks that level at some point in the future, it’s going to take off like a rocket. ”Maley said.