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Chart of the Day 2.6.13




Chart Analysis: Focus in the early trading today is on Zynga ($ZNGA), the online gaming giant. At Zynga’s ($ZNGA) height of popularity, people across the country were playing games such as Words with Friends, Mafia Wars, and Farmville. Since Zynga’s $435 million loss reported last year, investors may find it difficult to regain faith in this market.

After closing bell on Tuesday, Zynga reported a net loss of $48.6 million for Q4 equating to 6 cents per share, however earnings beat expectations by 4 cents per share at 1 cent per share.

Today’s NinjaTrader Chart of the Day takes a look back on the past year for Zynga ($ZNGA) and some signs to look for this year. After Zynga’s ($ZNGA) tumble last year, the price action on this chart since seems insignificant, however with positive earnings reports yesterday, now may be a great time to take advantage of some restored faith in Zynga ($ZNGA). Before rolling the dice and entering this market long or short, traders may take a look at some of the free tools within NinjaTrader designed to give you the edge in your trading game. Plotted on this chart is a Fibonacci retracement that was drawn from the year high to the year low for 2012. From the big picture, Zynga ($ZNGA) has a long way to go to recover its lofty market share from earlier in 2012. It may also be important to note that since this low point in November, Zynga ($ZNGA) has been on a slow steady incline and has climbed almost a dollar. The RSI (Relative Strength Index) indicator has slowly crept upward but has yet to show signs of this market being overbought as we had seen back in 2012.

Earnings news and other statistics on Zynga ($ZNGA) could prove to be a game changer for 2013, however with the price action of the past year, investors may exercise more caution on their Zynga ($ZNGA) betting to test the waters.