ZNGA Update

ZNGA was a long idea, it's also a longer term idea that appears to be basing. Currently ZNGA is up about +12.5% for us.

I was looking at it and trying to decide if anything needed to be done and actually kind of like ZNGA where it is right now.

As ZNGA is a partial position, it still has room for about 50% more until it's at full size, I might even consider adding in the area. I don't know if ZNGA picked up the same trait from FB, but when we were buying FB when everyone else hated it and making good money, FB was one of the few stocks that traded completely independent from the market. I have seen some of that in ZNGA.

Longer term daily the change in character is obvious.

You may recall this area in which support was broken on heavy volume in to a positive divergence, it looks a lot like a lot of cheap supply was absorbed.

Here's the daily 3C chart, daily divergences are pretty rare, especially leading like this is (positive). The downtrend was confirmed by 3C.

The 4 hour chart showing the negative divergence at the top and the first leading positive at the break of support I just mentioned and continued leading positive positioning.

Overall the longer term and probabilities on ZNGA look very bullish.

Other than a lot of action I'd consider normal, it looks like this 60 min chart shows a negative divergence meant to create a pullback, we want to see accumulation/positive divergences in to pullbacks , which makes them attractive as buy or add to areas with less risk and better prices.

The 10 min chart is already showing a decent positive divergence building through this area so I actually like ZNGA here.

The long term X-Over Screen shows the short signal...

Here the price moving average ALMOST give a long signal, but it would not have been taken due to the other two indicators still negative, at the white area all 3 indications go positive and we have a pullback that is quite typical early on  to the 10/22 bar averages. This is a big part of the reason I like ZNGA here as an add to, not quite a full position yet.

For now the Trend Channel has a stop on a 2-day closing basis below the $2.30 area, personally since there's some support in that area I'd probably take everything in to consideration beyond just a price stop, but I'd hope it holds the Trend Channel.

I'm not opposed at all to starting a position (long) here or adding to it, I'd personally bring it up to 50-75%.