Zynga's Key Technical Level To Watch
Zynga Inc (NASDAQ: ZNGA) shareholders could be in for some major volatility this week after the company reports Q4 earnings on Wednesday. With the stock already down 20.5 percent so far in 2016, here’s a look at how Zynga’s chart sets up ahead of earnings from a technical perspective.
There's very few silver linings to Zynga's chart at the moment. The stock is trading below all of its major moving averages and has broken below all major short-term support levels.
Zynga had actually held up relatively well throughout January, but the stock’s February breakdown below $2.20 to new all-time lows was a major technical blow The $2.20-2.25 region had served as support for the stock many times going back to late-2014.
Now that the stock has dipped below that level, it will likely serve as fairly strong resistance in the future.
Aside from a major earnings upside surprise, the best bet for a technical Zynga bounce in the near future is the fact that the stock’s RSI of 33.0 indicates that it is currently oversold. However, Zynga would need to get significantly above $2.25 before the chart begins to look constructive again.
Disclosure: the author holds no position in the stocks mentioned.
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