For the last 2 days I've been warning to take some profit off the table in ZNGA and that I still liked it long term, but there were signs it was time to take some money off the table.
Today ZNGA is down between -7 and -8%, why?
A deal between FB (another long term favorite) and ZNGA disclosed that they would no longer be required to place ads on each other's properties.
Zynga also said that it will no longer be required to use Facebook as the exclusive social site for its games or grant it exclusive games.
Facebook, while making similar disclosures also added that it can develop its own games after March next year. Its contract with Zynga prohibited it from doing that.
I decided taking half off the table and looking for an opportunity to add at a lower cost basis was the right path for my own style, which still leaves a partial position that is still up 8%.
The charts...
Here's when I started warning on Wednesday and yesterday on this daily chart and today's decline.
The tighter stop proposed for a trailing stop for those of you who wanted to go that route was just triggered on the last candle yesterday as it closed below the moving average,
The charts were warning that short term money was flowing out of ZNGA (1 min)
The divergence went all the way out to 10 min which is a decent pullback, but not a disaster.
Most traders wouldn't be looking forward to buying ZNGA again after today's decline, but they don't have access to this chart either...
This is a daily chart with a large positive divergence, ZNGA has turned a corner and there's big interest in the stock, thus the reason I'd like to add ZNGA back at a full size position when the pullback shows signs its over. I hope you did well with ZNGA.
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