tsla

Electronics Arts Stock at Risk for Bigger Losses After Earnings

EA has been selling off since breaching its 200-day trendline in early July

Jul 29, 2019 at 11:16 AM
facebook X logo linkedin


Electronic Arts Inc. (NASDAQ:EA) breached its 200-day moving average earlier this month, as concerns over the video game maker's "Apex Legends" update sent the shares spiraling 4.6%. EA stock has only extended this slide -- down 2% today at $87.76, after a price-target cut to $96 from $102 at MKM Partners -- and the options market is bracing for even more volatility after the company reports earnings tomorrow, July 30.

At last check, Trade-Alert put the implied earnings deviation for EA stock at 9.8% -- wider than the 5.2% next-day move the equity has averaged over the past eight quarters. Four of the eight post-earnings reactions have been negative, and only one has been large enough to match or exceed what the options market is expecting for Wednesday's trading (a 13.3% post-earnings plunge in February).

EA's options pits are relatively quiet ahead of earnings, with the 289,429 contracts currently making up open interest registering in the low 9th annual percentile. Calls have the slight edge over puts on an absolute basis, but not all of this action is necessarily bullish. Specifically, the August 145 call is home to peak front-month open interest, but data from the major options exchanges confirms mostly sell-to-open activity at this deep out-of-the-money strike.

Outside of the options pits, analysts are still mostly upbeat toward Electronic Arts, with 16 of 24 brokerages maintaining a "strong buy" rating on the stock. Plus, the average 12-month price target sits all the way up at $111.17. This puts the stock at risk for more bear notes, should earnings disappoint tomorrow evening.

EA shares could also see bigger headwinds should shorts continue to target the stock. Short interest rose 5.6% in the latest reporting period to 9.79 million shares. This represents just 3.3% of the equity's available float, though, meaning the bearish bandwagon is far from full.

ea stock daily price chart on july 29

 

Two High-Octane Trade Ideas. One Simple Goal: Intraday Profits.

Dynamite Day Trading Signals delivers two same-day options trades every week — powered by proprietary intraday analysis and 43+ years of trading expertise.

But this isn’t just another stream of alerts.

It’s a structured plan with clear entry and exit points – designed for traders who want to act fast, trade smart, and wrap up gains before the closing bell.

No guesswork. No overnight exposure – Just two well-researched setups per week — whether you prefer buying premium or selling it.

And the results speak for themselves: subscribers have locked in +245.8% total profit over the last six months (since inception!).

👉 Start your one-month trial now for just $10, and be ready for the next trade alert.