"You've Got to Stay Away From This Stock"

Earlier this week, Ari Wald of Oppenheimer appeared on 'Trading Nation' to give his thoughts on Activision Blizzard (ATVI). Ari's sentiment towards the stock can be summed up in one sentence: "It looks awful." And to be honest, it's hard to argue with that statement.

As Ari points out, Activision has failed to recoup its 50-day Moving Average, which is broke through back in October. Since then, we've seen a bearish downtrend and following its earning report, it broke through a very important level of support at $45.00/share.

The stock is indeed in a clear downtrend and according to Ari "Attempting to pick bottoms is a bad long term strategy." Again, I wholeheartedly agree. We need to let this get back above this $45.00 area and stabilize before thinking about taking a position. Even with the small rally the last few days, there is no evidence that this downward move is over.

Ari also mentions the relative weakness ATVI has seen compared to other peers in its industry, such as Electronic Arts (EA). As you can see in the chart below, EA is currently making a strong move upward, the opposite of what we are seeing in ATVI.

In the end, I think Ari is absolutely right in that there are zero reasons to be involved in Activision right now. I am a firm believer in the "let it prove itself" mindset, and until the stock can rebound above $45.00 and hold, it's a total guessing game (no pun intended) at this point.