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Zynga Macro View on the Monthly for NASDAQ:ZNGA by Liametric

Hi folks,

So, what we’ve got here, I believe, is a winner.

On-Balance-Volume is perhaps the most telling (and early) indicator we have, suggesting a breakout to ATH’s is coming. This can been seen on the monthly and the daily, which I believe are the most important for long-term trends. The weekly shows bullish momentum, but not yet a breakout.

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To support this, we can see the completion of a CUP on the chart. This coincides with +40% sales growth y/y every quarter for the past two years. Never mind the fact that they’ve beaten earnings expectations every quarter in that time-frame as well.

No, they’re not yet profitable, but if you check their financials, you’ll see that their net income has been trending towards positive for the past four quarters. This may be the biggest catalyst we have. And if you’ve seen how stocks react when a GROWTH company turns from red to black, then you know what I’m talking about.

For concerns about Zynga being just a pandemic play, well, this chart should show you that it’s clearly not JUST, as the company’s stock was trending upward well before.

As for the wave patterns, you can see we’ve fully fleshed out wave 1 on the macro scale, and are just coming out of a mini-corrective wave (or wave 2).

Wave 3 will be the most aggressive wave, though how fast we get there, I don’t know.

All I can say is that we have a company here making a lot of good moves, refinancing debt and making acquisitions while money’s cheap. There’s also rumor that another company might acquire Zynga , so who knows how that could affect the price action.

Whatever the case, there’s just too much here to ignore. And with Tech becoming the dominant play again, I have to say I’m a bit frothy at the mouth.

Trading at just over 5x sales, with a market cap of just $11.9 billion, this is a growth company worth taking a look at.

Good Luck!

DISCLOSURE: I’m currently long the stock, so take what you will from that.

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