Video game titans Activision Blizzard, Inc. (NASDAQ:ATVI) and Electronic Arts Inc. (NASDAQ:EA) could be subject to extra investor attention next week. Per data from Schaeffer's Senior Quantitative Analyst Rocky White, the stocks have been two of the biggest gainers on the S&P 500 Index (SPX) in the past six months -- and could be ripe for increased buying activity as the third quarter comes to an end next Friday, due to what's known as "window dressing."
Plus, both ATVI and EA are trading near historically bullish trendlines. Below, we'll take a closer look at both stocks, and explain why now may be a good time to buy short-term calls on the the video game names.
ATVI shares closed higher yesterday on news Comcast bought the Philadelphia team in Activision's Overwatch esports league. However, ATVI stock is down 1% today to trade at $64.38.
Nevertheless, the shares remain up 77.7% year-to-date, and considering the stock is trading within one standard deviation of its 40-day moving average after a lengthy stay north of here, more gains could be on the horizon. According to White, in the 13 previous times this signal has flashed the past three years, ATVI shares have yielded positive one-month returns 83% of the time, averaging a gain of 4.67%.
ATVI's short-term promise is further emboldened by its historical performance in the month of September. The stock is one of the best stocks to own in September, averaging a 4.2% monthly gain over the past 23 years, and finishing positive 65% of the time.
The good news for options traders is that now is an attractive time to buy premium on short-term ATVI options, considering they're pricing in relatively low volatility expectations at the moment. The stock's Schaeffer's Volatility Index (SVI) of 23% ranks in the 10th annual percentile.