Electronic Arts Inc. (EA) shares rose nearly 10% in after-hours trading on Tuesday after the company reported better-than-expected fourth quarter earnings, but shares of the video game company gave up some gains during Wednesday's session.

Revenue rose about 8% to $1.36 billion, beating consensus estimates by $160 million, and earnings per share of 69 cents beat consensus estimates by 10 cents per share. Despite these strong results, first quarter booking guidance came in at $690 million, which was less than the $806 million that analysts were expecting to see.

Analysts were largely bullish following the financial results. Oppenheimer's Andrew Uerkwitz reiterated his Outperform rating and raised his price target on EA stock from $88 to $110 per share, citing "Apex Legends" and sports title momentum. Credit Suisse's Stephen Ju also reiterated his Outperform rating and raised his price target from $110 to $115 per share, saying that Electronic Arts delivered a "clean top- and bottom-line beat."

On Wednesday, Sen. Josh Hawley (R) announced plans to introduce new legislation designed to ban "manipulative" video monetization practices. The move could reduce revenue and be a precursor to additional legislation on video games.

Technical chart showing the share price performance of Electronic Arts Inc. (EA)

From a technical standpoint, the stock briefly touched trendline resistance before moving lower during Wednesday's session. The relative strength index (RSI) remains neutral with a reading of 41.27, while the moving average convergence divergence (MACD) continues to trend sideways. These indicators provide few hints of where the stock may be headed in the near or intermediate term.

Traders should watch for a breakdown from lower trendline support at $90.00 to retest reaction lows of around $80.00 or a breakout from upper trendline resistance at around $100.00 to retest highs of around $107.50. While technical indicators provide few hints, the overall trend remains neutral to bearish given the downward sloping price channel.

The author holds no position in the stock(s) mentioned except through passively managed index funds.