Zynga's previous resistance around $9.50 in October and November last year turned into support at the start of this year. ZNGA spent the first three weeks of the year building support in the $9.50-$10.00 range before breaking higher. The stock is now in an established uptrend, but currently looks a little over extended. I'm expecting a slight pullback and some consolidation in the $11.00-$12.00 range before another leg higher can be attempted. However, as of Monday night after a long three day weekend, the shares are up about 2.5% to $11.90. If ZNGA opens below $12 and continues higher throughout the day, I anticipate another few dollars worth of gains in the coming weeks. However, if it breaks below previous resistance (current support) and closes below $11, the party could be over and a new downtrend could be on the way.
Comment:
A few other things that might hinder ZNGA: the current float is about a billion shares, so it likely won't move as fast as other lower priced stocks. There's also very little chance of a short squeeze, as the current short float is only around 6%.