Nintendo recently reported their financial results for Fiscal Year 2021, leaving a question on many investors' minds. Should you buy the stock? This article is not investment advice, but will instead provide technical analysis data about levels to watch across multiple time frames on the NTDOY stock chart.
Nintendo (NTDOY) Quarterly Stock Chart
Nintendo's stock had a challenging first quarter of 2021. After failing to set a new all-time high above last year's record of $82.55/share, NTDOY traded inside of the price range of Q4 2020 during Q1 2021. A break today below last quarter's low of $68.13/share has triggerred an inside quarter and down sell signal. This would be an active sell signal until the end of June, so this is certainly an important price level to pay attention to. On the other hand, a break above $82.00/share would create a reversal strategy buy signal. That is a long ways from where the stock is currently trading, and the $68.13/share level was just broken multiple times during today's session.
Nintendo (NTDOY) Monthly Stock Chart
Nintendo (NTDOY) shares traded inside March 2021's range during the month of April, setting the stock up for another buy or sell signal. At the time this article was published, shares were trading below the April 2021 low of $70.01/share, meaning there is an active inside month and down sell signal. This active sell signal will be present until the end of May, and could portend further pain in June.
Nintendo (NTDOY) Weekly Stock Chart
Many traders and chartists believe in horizontal support and resistance lines, which is cute, but over here we pay attention to broadening formations. Put simply, stocks trade in a series of uptrends and downtrends across different time frames. Based on the current downtrend, Nintendo (NTDOY) shares could easily drop below $65/share. The longer the selling persists, the worse this can get, especially if the stock breaks down below the current weekly downtrend. With current monthly and quarterly sell signals staring shareholders in their face, it is likely that Nintendo shares could feel some pain for the several weeks. The E3 2021 Nintendo Direct video presentation could be a catalyst for further selling or a bottoming process depending on the news announced. That's about a month from today, so there might be no reason to rush into buying the stock right now.
Nintendo (NTDOY) Daily Stock Chart
I don't put much value into moving averages, but some people still care about this backwards-looking technical indicator. It is interesting to note that Nintendo broke below the 200-day exponential moving average of $69.52/share, which is just another piece of evidence supporting the thesis that the stock may be in for some pain this year. Each time shares have broken this trend line has presented a great long-term buying opportunity, but many times the stock struggles for months before resuming any kind of bull move. It is entirely possible that we are in the very early days of a down move in Nintendo shares, and most of these momentum breaks end in capitulation selloffs where the stock sharply dips lower. It's not clear where Nintendo is heading, but a drop in the $50s for NTDOY shares would not be that surprising.
Nintendo (NTDOY) Yearly Stock Chart
Before anyone rushes out the door to scream about how bearish Nintendo's stock chart looks, please take a look at the yearly chart. NTDOY shares are still trading inside of 2020's massive price range. After setting an all-time high of $82.55/share last year, Nintendo shares only reached a high of $82/share during 2021 before selling off. Last year's low is $35.82/share is a long ways away from where the stock is currently trading, so it seems very likely that 2021 will be an inside year for Nintendo shareholders. With such a massive prior year range, there can still be a lot of frustrating and scary volatile moves ahead with the stock still forming an inside bar. 2021 could be a pause that refreshes for Nintendo shares, as a result. NTDOY traded inside 2018's price range in 2019 followed by a breakout to the upside in 2020. It's entirely possible that the stock is setting itself up for a repeat of that set up with a lowered bar for expectations in 2022.
At the end of the day, the decision to buy or sell Nintendo shares goes beyond technical analysis. In a stock market where 90% of trading volume is governed by algorithmic trading, it is important to pay attention to technical indicators. While Nintendo has a ton of catalysts ahead of them in the long-term, the company did provide tepid full year guidance earlier this month, and they are facing very tough year-over-year comparisons due to the massive success of Nintendo Switch unit sales and games like Animal Crossing: New Horizons in 2020.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
Captain Business posted a new article, Nintendo (NTDOY) stock chart - share price levels to watch before you buy in 2021
It's nice to see that Business finally got promoted from 1st Lieutenant. Well earned!
battlefield promotion :(
"You're it until you're dead. Or till I find someone better."
So do I buy more or not???