EA - great long term bullish setup
EA is one of the world's largest video game publishers. The firm owns number of large franchises, including Madden, FIFA, Battlefield, Mass Effect, Dragon's Age, and Need for Speed. EA recently signed a 10-year contract with Disney that granted EA the exclusive rights to develop Star Wars games for core gamers across all platforms. It's Net margin is 18.7%, Return on Capital is stunning 309%. But is is not cheap trading at Price-to-Free-Cash-Flow over 21. Therefore, its a momentum stock.
EA has been following nicely a classic five wave up fractal starting off the low in July 2012.
In July 2018 it made a major top in wave ( 3 ) up. The drop into December 2018 looks corrective and can be all of the wave ( 4 ) down. It was a deep one retracing 66.7% of the huge rally of the wave ( 3 ) up. We can buy the company at 2017 prices even after initial January rally. The first target is 120. But if we have seen the bottom of wave ( 4 ) then we should see another multi year rally in wave ( 5 ) targeting new all time high.
EA - daily chart updated on 31 January 2019
