I like Zynga stock here as a speculative buy. Â And though it carries great risk, I have taken a long position.
Let me explain why.
- With the recent CEO hire, a window of potentially positive surprises opens up as they lay out new initiatives (possibly virtual reality gaming?)
- This lines up well with a technical setup allowing investors to own for a potential double while setting downside risk around 2.10.
Again, this is a speculative buy that carries a lot of risk – not for most traders. (Hence, why it is trading under $3).
As I said, anyone looking at Zynga stock has to have a stomach for risk, because I could lose 15% or more here.  Another point worth noting is to catch this move, I’m going to probably have to hold through an earnings announcement.
To remove some of that risk, one could hold off on entering until either the downtrend break and/or earnings pass for another opportunity closer to the 2.10 area.
The Trading Levels:
Upside Targets: Â 3.00-3.10, 4.50, 5.89
Downside All or Nothing Zone (stops!): Â 2.10ish
This is an explosive technical setup with plenty of risk involved, but it might just be worth it. Â You just have to understand your risk tolerance to play this one.
Read more from Aaron on his blog North Star TA.
Twitter:Â @ATMcharts
The author has a position in ZNGA at the time of publication. Â Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
