When I covered this stock a few weeks ago it immediately shot higher as it broke above its 50-day moving average.
Now it’s retraced back to good support, and it’s ready to shoot higher again.
If you’d like to buy a stock (or call options) on an explosive low base pattern read below.
Activision Blizzard (ATVI) inched above a 4-day consolidation pattern on Wednesday.
If it continues higher, and trades over $48.20, a breakout that could lead to a quick move up to $53 and a 100%+ gain with the right trade.
The chart also has a good stop loss level under $46.25.
If this breakout move happens in the next 30 days, the August 55 calls will likely double in price.
A 100% gain sounds good, but if such a move happens, I’d look for the move to continue even further. This is why I mention the August expiration.
The reason for my optimism for a breakout that could move the stock 20%-30% is based on the duration of the base, and gap down from $62 to $57.
If ATVI clears $52 then $57 looks like a likely level, and from there the next step is to fill the gap at $62.
Rick Nartarian, Chief Investment Officer
The American Investor Daily