ZNGA

ZNGA is a stock I had a mental association with, DOG. However I looked at it last night and liked what I saw, it's not in a great entry place right now, but it's definitely worth keeping on the radar, setting some alerts and looking for that entry as it has a lot more upside to go.

ZNGA is also a good example of how predictable traders are with old concepts that they follow blindly and that are used by Wall Street to Wall Street's benefit, for nothing else, this post is worth reading just for that.

 The ROC in price is quite visible even without the indicator as well as the change in character of volume.

 Note the dates and areas where support was broken and volume surged, this created cheap supply and a lot of it. It doesn't matter whether they were stops being hit or shorts entering, they all produce supply in the market and at favorable prices which makes it easy to accumulate a large position quickly with most people thinking that ZNGA is bearish, meanwhile under the surface something completely different is going on.


 The 15 min 3C chart confirms ZNGA's up trend and then downtrend nearly perfectly, in late July/August it goes in to a leading positive divergence, the same area volume picked up on large gaps down.

 On this 2 min chart you can see more detail as gaps down on volume are accumulated, traders follow support and breaks of it causing volume surges, each one is accumulated.

Here's the most recent break of support and it too was accumulated.

Today ZNGA is up double digits, it may fill the gap it crated today or it may remain as an island bottom, but at some point it will offer a low risk entry and I would certainly consider it as the size of the accumulation here suggests ZNGA has considerable upside in it for them to unload all of the accumulated shares.