How to Trade Activision Blizzard Before and After Q3 Earnings, EU Decision on Microsoft Acquisition

Activision Blizzard, Inc ATVI traded slightly lower as the stock headed for its third quarter results, expected after the market close on Monday.

When Activision Blizzard reported higher second-quarter revenue on Aug. 1, the stock fell about 1% the next day before rebounding nearly 2% in prices for the following two trading days. The stock then entered a downtrend, falling more than 12% between August 5 and Monday.

For the second quarter, Activision Blizzard reported adjusted earnings of 48 cents per share, which was in line with analysts' estimates. The company reported revenue of $1.644 billion, beating the estimate of $1.58 billion.

Third quarter analysts on average estimate Activision Blizzard will earn 50 cents per share on revenue of $1.69 billion.

On Tuesday, traders and investors will await a preliminary decision from EU antitrust regulators on whether to clear Microsoft's proposed $69 billion acquisition of the gaming company. dollars. Whether Activision Blizzard goes up or down after earnings, this move could ruin an up move for bulls or a down move for bears.

From a technical analysis perspective, Activision stock appears neutral heading into the event, having reversed an uptrend but holding above the upper trendline of a falling channel.

It should be noted that holding stocks or options above a profit print is akin to gambling, as stocks may react higher in the event of loss of profits and downward in the event of a beating of profits.

See also: Activision, Take-Two and 3 stocks to watch before Monday

The Activision Blizzard chart: Activision Blizzard fell back into a declining channel pattern - which started on August 19 - at some point on Monday, but the bulls entered and bought the decline , causing the stock to fall. pop-up above the pattern.

If Activision Blizzard closes the trading day above $71.30, the stock will print a bullish hammer candlestick, which could signal higher prices coming in on Tuesday.< /p> If this happens, Activision Blizzard may find resistance at the eight-day or 21-day exponential moving averages (EMAs). If the stock is unable to break through the EMAs, bearish traders can watch for a bearish candlestick, such as a doji or shooting star candlestick, to print just below the zones. Bullish traders want to see Activision Blizzard break above the $74 mark, which would suggest that the recent bearish price action was a bear trap. If the stock can trade above this level on Tuesday, Activision Blizzard could resume its uptrend. Activision Blizzard has resistance above $72.20 and $74.59 and support below at $67.77 and $64.53. See also: If you invested $1,000 in this stock 10 years ago, you would have $6,600 today

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