Game Over for Electronic Arts Stock Bulls?

Electronic Arts (NASDAQ: EA) has been on one heck of a run over the last 3 ½ years.
The stock moved from under $11 a share in August 2012 to a high of $76.92 in October 2015. That is a gain of over 600% in a relatively short period of time.
While that is an impressive run, several different factors are suggesting that the bullish run is over and the stock is in for an extended downward move.
First, when we look at the daily chart, we see a downward sloped trend channel that has defined trading over the last four months. The starting point of the upper rail of the channel is the all-time high I mentioned previously, and it has been connected to two other points now.
One thing I believe about trend channels, as opposed to a trend line, is that the rails don’t have to contain all readings, as long as they contain almost all of the readings.

We see that Electronic Arts stock broke below the lower rail that had been established by the two previous low points of the short-term downtrend. That doesn’t bother me, since I have a bearish stance toward the stock. If it had broken above the upper rail and the channel was downwardly sloped, that would worry me.
I also want you to look at the bearish crossover of the daily stochastic readings and what happened the last time these indicators made a bearish cross. We see that the stock dropped over 25% in just 10 days.
Turning our attention to the weekly chart, we see that the 13-week moving average has just made a bearish cross below the 52-week moving average. The last time we saw these two moving averages make a bearish crossover was in January 2012 and the stock fell another 40% after the moving averages crossed.

Looking at the sentiment toward Electronic Arts stock, we see extreme bullishness from analysts. Of the 21 analysts following the stock, 18 have it rated as a “buy” and the other three have it rated as a “hold.” Not one analyst has the stock rated as a “sell.” This leaves plenty of room for downgrades.
I would look to short the stock in its current range, with a target of a short-term move to $53 at the very least. If the stock breaks below the February low, there really isn’t much in the way of support until you reach the $38.50 level.
A move from the current level down to the $38.50 level would represent a 40% decline. That is approximately the same drop we saw in 2012 when the 13-week moving average crossed below the 52-week moving average.

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