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Electronic Arts Traded below Its Moving Averages in December 2015

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Shareholder returns and stock trends

Electronic Arts (EA) generated investor returns of 42.7% in the trailing 12-month period and 0.10% in the trailing one-month period. In comparison, it generated 105% returns in 2014 and 47% YTD (year-to-date). The firm’s share price fell 3% in the trailing five-day period.

In comparison, Activision Blizzard (ATVI) and Zynga (ZNGA)—peer companies in the home entertainment software subsector—generated returns of 0.13% and 4.2% in the trailing five-day period, respectively.

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Moving averages

On December 24, 2015, Electronic Arts closed the trading day at $68.95. Based on this figure, here’s how the stock fared in terms of its moving averages:

  • 2% below its 100-day moving average of $69.80
  • 6% below its 50-day moving average of $70.81
  • 37% below its 20-day moving average of $69.20

Moving average convergence divergence and RSI

The MACD (moving average convergence divergence) is the difference between the short-term and long-term moving averages of a firm. Electronic Arts’ 14-day MACD is -0.23. This negative figure indicates a downward trading trend.

The company’s 14-day RSI (Relative Strength Index) is 48, which shows that the stock is slightly oversold. Generally, if the RSI is above 70, it indicates the stock is overbought. An RSI figure below 30 suggests that a stock has been oversold.

Analyst recommendations

Out of 23 analysts covering the Electronic Arts (EA), 17 have a “buy” recommendation on Electronic Arts and six recommend a “hold.” The analysts’ stock price target for the firm is $83.83 with a median target estimate of $83. This means Electronic Arts is trading at a discount of 17% with respect to the median analyst price target.

Activision comprises 3.9% and 1.4% of the iShares North American Tech-Software ETF (IGV) and the First Trust ISE Cloud Computing Index ETF (SKYY), respectively.

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