A gain of 26.52% in 2018 for shares of Activision Blizzard, Inc. (ATVI) has shown increasing share prices accompanied by increasing trading volumes. Activision's shares have been performing very well this year as many growth stocks make new 52-week highs. What makes this company interesting is its growth trajectory in eSports, which is likely causing investors to get excited for Activision Blizzard's long-term potential. With bullish trading activity occurring alongside a favorable fundamental outlook, it should come as no surprise that the stock has trended higher in 2018. We have found that, by focusing our efforts in looking for companies with great fundamentals alongside potential bullish institutional activity, we can uncover great performing stocks.
In the perspective of Macro Analytics for Professionals (MAP), the strongest indicator of positive price momentum is obtained by measuring potential institutional accumulation. In 2018, Activision stock has logged 11 of these rare signals, with the first bullish signal occurring on Jan. 11. This is alongside the bullish action we are monitoring in the technology sector as a whole recently. We want to see bullish activity in the shares alongside solid fundamentals and sector leadership. This indicates that, over time, demand for the stock should increase. (See also: Power Up Your Portfolio With Video Game Stocks.)
In the chart below, Activision Blizzard shares broke out to new highs accompanied by increasing accumulation. Shares should continue the upward trajectory:
MAP's process focuses on identifying companies with healthy fundamentals accompanied by outsized, unusual institutional activity to try and measure potential accumulation/distribution at the single-stock level. By studying these data points, we can hypothesize which equities institutions are trafficking in and marry this information with fundamentally sound companies. We want the odds on our side when looking for the highest-quality stocks.
When deciding on the strongest candidate for long-term growth, we consider many technical areas important to success. A few of these factors for Activision Blizzard are as follow:
On top of a great technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Activision has solid earnings and sales growth rates:
Activision Blizzard checks the box on strong technicals and fundamentals while showing bullish institutional momentum over the past year. We believe that the current level for the shares is in position for further upside. Activision shares have been powering higher this year, and with multiple unusual institutional activity signals, it could be setting up for an additional move to the upside. All of this points to further long-term bullish action for the stock.
The Bottom Line
Activision Blizzard stock represents a potential buying opportunity for the long-term investor. Given the solid earnings growth, sales growth and multiple unusual accumulation signals, this stock could be worth a spot in a growth portfolio. (For additional reading, check out: How the Video Game Industry Is Changing.)
To learn more about MAP's institutional signals, please visit our "About Us" page.
Disclosure: The author holds no position in Activision Blizzard shares at the time of publication.