Barclays Turns Bullish on Chinese Tech Stock
NTES shares struggled in 2018
Video game stocks had a horrible 2018, and it's continued into 2019, illustrated in part by the demise of Call of Duty maker Activision Blizzard (ATVI). However, Barclays believes it's found a potential bright spot in the space, calling attention to Chinese tech firm NetEase Inc (NASDAQ:NTES), which makes a number of mobile games. The brokerage firm upgraded NTES to "overweight" from "equal weight," and lifted its price target to $300 from $270, predicting tailwinds from the release of "Diablo Immortal" later this year, a game it's co-developing with ATVI.
To be sure, NTES shares weren't saved from the sector bloodbath of 2018, falling from a late-2017 peak of $377.64 to as low as $184.60 in September. They are now testing potential resistance from the 50-week moving average and the $259 area, which is roughly a 38.2% Fibonacci retracement of the fall from their record peak to their September low. At last check, the security was down 1.2% at $240.59.
