Changyou.com Limited develops and operates online games in the
People’s Republic of China. It is primarily involved in the development,
operation, and licensing of massively multi-player online games, which
are interactive online games that might be played simultaneously by
various game players; Web-based games, which are played over the
Internet using a Web browser; and mobile games that are played on mobile
devices and require an Internet connection. The company also owns and
operates Web properties and software applications for PCs and mobile
devices, including the 17173.com Website, an information portals for
game players in China; the wan.com Website, a games portal that provides
a collection of Web games of third-party developers to game players;
RaidCall, which provides online music and entertainment services,
primarily in Taiwan; and the Dolphin Browser, a gateway to a host of
user activities on mobile devices, with its users in Europe, Russia, and
Japan.
Take a look at the 1-year chart of Changyou.com (NASDAQ: CYOU) below with added notations:
After rallying nicely from mid-October until the beginning of May,
CYOU has been trading mostly sideways over the last 2 months. During the
sideways move the stock has formed a common pattern known as a
rectangle. A minimum of (2) successful tests of the support and (2)
successful tests of the resistance will give you the pattern.
CYOU’s rectangle pattern has formed a resistance at $35 (red) and a
$31 support (green). At some point the stock will have to break one of
the two levels.
The Tale of the Tape: CYOU is trading within a
rectangle pattern. The possible long positions on the stock would be
either on a pullback to $31 or on a breakout above $35. The ideal short
opportunity would be on a break below $31.
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