Boston, MA 09/18/2014 (wallstreetpr) – Zynga Inc (NASDAQ:ZNGA) (Closed: 3.15, Up: 4.30%) had a great day in the market as further details about its new mobile game is creating a buzz in the marketplace. Zynga Inc (NASDAQ:ZNGA) is a social game development company and the new partnership with Time Warner’s too got the market very interested about the company recently. The perfect bullish Marubozu candle on Wednesday was preceded by another very bullish candle on Tuesday and a Bullish Hammer on Monday. With the volume jumping at 31.24 million against the average of 18.35 million, suggesting immense interest translating into actual buying, one must reconsider the probable path of the stock price.
For more than four weeks, the price has been stuck in the narrow range of $2.80-$3.15. A break above $3.15 may take the stock immediately to the intermediate supply zone in $3.30-50 levels. The inverse Head & Shoulder pattern seen as the base has a head with the depth of about 70 cents, implying a pattern target of $3.50 levels, with $3.07 taken as the breakout level.
One might argue that the entire pattern is a larger Rectangle actually, with the Adam & Eve Double Bottom seen around $2.70 levels, created with the June & August lows this year. But a more powerful resistance is visible, which comes from the trendline connecting the 2012 bottom of $2.09 and the 2013 bottom of $2.50. The extension of this trendline, after breaking in June 2014, had acted as a very stiff resistance for the next 6 weeks and pushed the price down to $2.70. This trendline currently stands at $2.45, but will appreciate by about 2 cents every week. One must keep a note of it until it is broken above.
The MACD indicator suggests the complete absence of any selling pressure and the increase in volume points to a renewed interest on the part of the market participants. Investors could buy this stock at the current market price and add above $3.50.