Top Video Game Stocks to Watch in 2021: Prices and Market Outlook

As the video game industry continues to thrive, fueled by ongoing COVID-19 restrictions and the launch of next-generation gaming consoles, stocks in this sector are poised for significant gains throughout 2021.

Electronic Arts Inc. (EA) recently kicked off the earnings season for major video game manufacturers by surpassing fiscal Q1 2021 profit expectations, despite lowering its full-year earnings per share guidance. This cautious outlook was anticipated due to EA's reliance on professional sports content, which faced disruptions amid the pandemic. Nevertheless, investor confidence pushed EA's stock close to its 2018 peak at $151.26.

Key Highlights

• Video game stocks are trading near historic highs.
• Take-Two Interactive Software (TTWO) shows the strongest bullish momentum among peers.
• The arrival of next-generation consoles is expected to propel further growth.

Take-Two Interactive Software, Inc. (TTWO) and Activision Blizzard, Inc. (ATVI) are set to announce earnings soon, with both stocks already nearing record highs thanks to robust sales during pandemic lockdowns. The December launch of new gaming consoles promises additional momentum, reinforcing the sector’s upward trajectory.

Investment Insight

Reaching all-time highs requires strategic risk management and profit planning, as such milestones often involve unique market dynamics. Investors should apply technical analysis principles to maximize returns during these critical phases.

EA’s stock experienced a notable journey, climbing from a 2015 low near $71.16 to its 2018 peak at $151.26 before a mid-term correction. After stabilizing in the low $70s, EA’s shares rallied in 2019 but faced resistance around $100. The stock faced volatility in early 2020 but rebounded strongly through mid-year, forming a consolidation pattern that suggests a potential breakout toward previous highs. However, slower accumulation signals could temper the pace of gains.

Understanding Accumulation

Accumulation reflects increasing buying interest in a stock over time, often indicating investor confidence and potential upward price movement. Monitoring accumulation trends helps anticipate breakout opportunities.

Take-Two Interactive’s shares remained capped in the low $20s until a breakout in 2015 sparked a historic rally, surging over 600% to near $140 by August 2018. After a correction and recovery phase, TTWO reached an all-time high of $161.11 recently, supported by strong accumulation signals. This trend indicates potential for further upside, although a pullback might offer a low-risk entry between $140 and $150.

Activision Blizzard’s stock reached a high of $19.28 in 2008 before tumbling during the economic downturn. It rebounded past prior highs in 2014 and surged to an all-time peak of $84.68 in October 2018. Despite some fluctuations, ATVI has maintained strength, trading just below its 2018 high with accumulation levels at record highs, suggesting favorable prospects following upcoming earnings.

Conclusion

The video game sector is demonstrating robust investor interest, with leading companies trading near historic highs. The combination of pandemic-driven demand and next-generation console releases positions these stocks for continued growth in 2021.

Disclosure: The author held no positions in the mentioned securities at the time of publication.

Explore useful articles in Markets News as of 08-08-2020. The article titled " Top Video Game Stocks to Watch in 2021: Prices and Market Outlook " offers in-depth analysis and practical advice in the Markets News field. Each article is carefully crafted by experts to provide maximum value to readers.

The " Top Video Game Stocks to Watch in 2021: Prices and Market Outlook " article expands your knowledge in Markets News, keeps you informed about the latest developments, and helps you make well-informed decisions. Each article is based on unique content, ensuring originality and quality.