Activision Blizzard, Inc (NASDAQ: ATVI) gapped down about 15% lower on Wednesday morning after the company printed its third-quarter results and a grim outlook for its FY 2021 earnings, where it expects net bookings to fall. Activision also postponed the release of two games.
On Oct. 20, Activision Blizzard broke up bullishly from a head-and-shoulders pattern Benzinga called out on that date and ran almost 7% north over the following four trading days.
The stock then began to fall slightly into its earnings print and confirmed a downtrend with a low created on Oct. 28 and a lower high printed on Nov. 1.
On Wednesday, Activision Blizzard immediately dropped down to test the $64.53 level as support and bounced.
Activision Blizzard’s volume was massive on Wednesday morning and within the first half hour of the trading session 11.55 million shares had already exchanged hands compared to the average 10-day volume of 8.3 million. The high volume indicates a high level of investor interest, and in this case the volume is bullish.
If Activision Blizzard closes the trading day near its high-of-day it will print a hammer candlestick, which could indicate higher prices will come on Thursday. Thursday’s candle will need to print for confirmation the downtrend is over.
There is now a large gap above between about $67.03 and $77.04, which is likely to be filled in the future.
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