Skip to main content

Activision Blizzard: How To Do A Stock Analysis With Volume Profile

 

Hello guys,

before I go into today’s analysis, I would like to invite you to a special webinar that I am going to have tomorrow –  Thursday (12th). The topic of the webinar is going to be “Long-Term Investing With Volume Profile“.

Register your FREE seat using this link:

https://bit.ly/374RvwJ

In today’s analysis, I am going to talk about a long-term trading opportunity on Activision Blizzard (ATVI) stock.

ATVI – Company Profile And Current Problems

ATVI is a company merged from two companies Activision and Blizzard. Both companies make computer games. Blizzard made games like World Of Warcraft, Diablo, Starcraft, … I would say it is a legendary game studio that every person who plays or played computer games knows.

Blizzard is currently having some problems as lots of their employees went on strike, because they did not like how the company was treating them.

If you start reading the news then you will see that there is quite a lot of the bad stuff that came up and that the company needs to deal with.

Even though the company is going through tough times now, I don’t think this is something from which they can’t recover. Also, a lot of the bad stuff is related more to single “scandals” and not to the overall economic state and health of the company.

Blizzard still has strong and huge fan support and a very good business model. The strikes and the problems the company is facing now hasn’t affected that (yet).

Still, those current problems made the ATVI stock drop from around $100 to $80 per share. I think this could be a nice opportunity to buy a good stock for a nice discount 🙂

Why do I think now could be the good time? Let me explain…

ATVI: Volume Profile Analysis

The price of ATVI stock has been in a strong uptrend since 2019.

I used my Flexible Volume Profile indicator to see how volumes were distributed throughout the uptrend area.

As you can see from the picture below, there was a significant heavy volume area around 79.00.

This means that the BIG trading institutions who were driving the price of ATVI higher and higher were adding massively to their Long positions there. This was a very important zone for them.

What happened now, is that due to the problems the company is facing the price dropped right into the heavy volume area.

This heavy volume area should now work as a strong Support as those BIG institutions who were adding to their Longs there before should defend this zone.This zone is important for them – lot of their money is there!

The chart below is a Weekly chart and there has already formed a pinbar exactly at the 79.00 Support. This could mean the buying reaction has already started.

The Volume Profile setup I used there is called the “Trend Setup“.

ATVI, Weekly chart:

Price Action Setup

A nice addition to the Trend Setup is also a Price Action setup.

This Price Action setup says that a broken Resistance becomes a Support.

If you look at the chart below, then you can see that the area around 79.00 has already worked as a very strong Resistance in the past. The price bounced off it three times. Each reaction was a very strong one.

Then at the end of 2020 this Resistance got breached and it became a Support – the Support the price is currently testing.

ATVI, Weekly chart:

What is nice about this is that the two setups – Volume Profile and Price Action align and both point to the same Support area around 79.00

Summary

How I currently see it is that employee problems in the company caused a drop of the stock. The problems were only in one of the merged companies – in Blizzard. Not in Activision.

I believe that the company is strong and that this won’t affect their sales too much.

The price has now dropped to a significant Support and I think this might be a nice opportunity to buy a good company for a discounted price.

Still, the problems could start to pile up and for that reason, I would advise you to be careful and if you decide to invest in ATVI now, then do so with a smaller trading position.

I hope you guys liked my analysis! Let me know what you think in the comments below!

Happy trading,

-Dale

Comments

Popular posts from this blog

How To Trade The Point Of Control (POC)

DEFINITION: Point Of Control (= POC) is a price level at which the heaviest volumes were traded. The most important thing that the Volume Profile indicator shows is the POC. I dare say that if you used Volume Profile only for the purpose of identifying the POC, you would be a way better and trader then 99% of the retail traders. No matter what trading strategy you trade. Why do I say this? Why is POC so important? Point Of Control is so important because it shows the place where the most trading took place – where the biggest trading positions were accumulated. POC shows the BIG guys! Who accumulates those huge trading positions? The BIG guys – that’s the big financial institutions like hedge funds, pension funds, huge banks, etc… It is those BIG guys who move and manipulate the markets. It would be a huge advantage to know where they placed most of their positions, right? The good news is th

Beginners Guide to Order Flow PART 1: What Is Order Flow?

DEFINITION: Order Flow is an advanced charting software which enables you to read all trading orders that are processed in the market. It helps to track the BIG financial institutions through the trades they make. Most people get confused when they open up a chart with Order Flow for the first time. There is no shame in that. Order Flow shows so many information and it is easy to get overwhelmed and confused if you don’t know what to look for! This Beginners Guide will teach you how to understand how Order Flow works and how you can use it in your trading! In this 1st part of the Order Flow Guide I will show you around the Order Flow interface. Footprints The Order Flow does not show standard candles, but it shows FOOTPRINTS . A footprint shows not only Open, High, Low, Close (as standard candles) but it also shows orders traded in that candle. Orders can be

5 Character Traits of a Successful Trader – Tips & Tricks of the Pros!

 Maybe you are interested in trading, and you have taken the first step by researching on forex trading. You might also be currently trading but going through a tough time with your results in the markets and dealing with the recurrent autosuggestion, telling you how this journey might not be for you or you are not capable of achieving successes in this journey. It is essential to know that you are not alone in this feeling, and before you fall into the rabbit hole of depression, feeling like a failure in yet another skill you have chosen. Let me make it clear; the answer is YES, anyone can achieve success in trading , including you. It would only cost you a few character trait adjustments. Before we delve in, it is vital to point out that success in re