2 Stocks Swinging on PlayStation 5 Buzz

EA is finding support at its 80-day moving average

Apr 16, 2019 at 1:56 PM
facebook twitter linkedin

The U.S. stock market is higher today, thanks to a dovish Fed and well-received Johnson & Johnson (JNJ) earnings. Among other stocks making notable moves are chipmaker Advanced Micro Devices, Inc. (NASDAQ:AMD), "Battlefield V" creator Electronic Arts Inc. (NASDAQ:EA), and streaming name Roku Inc (NASDAQ:ROKU). Here's a quick look at what's moving the shares of AMD, EA, and ROKU.

AMD Stock Seems Ripe for Bull Notes

Advanced Micro Devices stock has shot up 2.7% to trade at $28.08, after a Wired report indicated AMD chips are "at the heart of" Sony's (SNE) PlayStation 5. This positive price action is just more of the same for a security that's up 52% so far in 2019. And while the shares have pulled back from their April 3 year-to-date (YTD) high of $29.95, they have found a foothold atop their rising 20-day moving average.

A round of overdue bull notes could keep the wind at AMD stock's back. While half of the 20 covering analysts continue to maintain a "hold" or "strong sell" rating on the outperformer, the average 12-month price target of $25.29 is a discount to current trading levels.

EA Stock Hit By News of an Origin Bug

Buzz about the latest PlayStation iteration and reports of a potential security flaw are weighing on Electronic Arts today. More specifically, EA stock is down 4% at $93.93, after TechCrunch reported on a bug in the company's Origin online gaming platform that left users vulnerable to hackers. The issue has already been fixed.

EA stock has been charting a series of lower highs since hitting its YTD peak of $108.80 on Feb. 15. However, the video game stock remains up 19.1% on the year, and is finding support at its 80-day moving average. Several options traders are likely hoping for a big bounce from here. The June 110 call is home to peak open interest on EA, and data from the major options exchanges confirms buy-to-open activity here.

Analyst: Disney+ Could Be Big Driver for Roku

Needham reiterated its bullish outlook on Roku, with analyst Laura Martin maintaining her "buy" rating and $85 price target, and calling the stock a top pick for 2019. Plus, Martin said the launch of Walt Disney's (DIS) Disney+ streaming service this fall could be the "next $1 billion upside driver" for Roku.

It's been a tough month for the stock, down 10.5% so far. However, the selling appears to have stalled near ROKU's 60-day moving average, and the shares are still boasting an 88% YTD lead, last seen trading up 2% at $57.74.

Short sellers have been hitting the bricks amid this longer-term surge, with short interest dropping 40% between the mid-January and late-March reporting periods. ROKU is still heavily shorted, though, considering the 8.7 million shares still held by bears represents 11.4% of the stock's available float.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners