Activision Blizzard, Inc. (ATVI) shares rose more than 4% during Thursday's session after KeyBanc analyst Tyler Parker resumed coverage on the stock with an Overweight rating and a price target of $60 per share. The analyst believes that the company could reveal a major title, such as "Diablo 4" or "Overwatch 2," at BlizzCon in early November. He also notes that solid execution should drive solid results over the years.
The move by KeyBanc follows other analyst upgrades made last month. For example, Bank of America Merrill Lynch upgraded the stock to Buy with a $56 price target on July 25. Analyst Ryan Gee noted the the stock is on the "verge of inflection" after a period of investment in people and content to create a "potent" content slate. The analyst also cited an "improving competitive outlook" for Activision's "Call of Duty" franchise.
From a technical standpoint, the stock broke out from trendline resistance and its 200-day moving average to fresh highs. The relative strength index (RSI) moved into overbought levels with a reading of 70.91, but the moving average convergence divergence (MACD) resumed its bullish uptrend. These indicators suggest that the stock could see a brief period of consolidation above key support levels before moving higher.
Traders should watch for consolidation above trendline support and the 200-day moving average at around $48.38 over the coming sessions. If the stock breaks down from these levels, it could retest trendline support and the 50-day moving average at $46.06, but that scenario seems unlikely to occur given the bullish sentiment. The next major area of resistance isn't until around $62.50, when the stock closes the gap from late 2019.
The author holds no position in the stock(s) mentioned except through passively managed index funds.