CD Projekt Red on the recovery path?Looks like CD Projekt Red formed a double bottom and broke out of an upward channel to the upside.
It also broke out of the huge falling wedge it was forming since its decline that startet in December 2020. Yesterday was the retest of the upper dynamic resistance of that wedge. With todays candle it perfectly bounced off. This is pretty good!
Next resistance is at 46.890, also where the EMA100 is at the moment. I guess we will see a rejection from that level and a bounce from EMA50, before we go higher. From the fibs it also looks pretty good. If we pass 104.950, we could go up until 148.950-232.525. This is quite huge potential.
From the fundamental side:
1) Of course, CDPR had issues with the release of Cyberpunk 2077. However, it seems like they were able to fix a lot of bugs and it looks as if the title will be back in the PSN store any time soon. Further, CP2077 got some more positive awareness since it runs on the newest generation of Tesla's infotainment system.
2) On the other hand, the lawsuite is still ongoing. But, they made quite a huge amount of money with CP2077 and had only very few refunds. And similar cases exist that went well for the game studio (see EA and Battlefield). I expect the same for CDPR here, since the numbers are really well and the title runs better now.
3) The Witcher Season 2 will be released on Netflix this year and that series had some good reviews so far and extended the fanbase of that franchise - even though there were some controversial discussions about the cast. And the Witcher games sold pretty good upon the release of Season 1!
4) CDPR sits on a huge pile of cash for further development of AAA titles. Some updates are due in the second half of 2021 (NextGen Witcher, Mobile Witcher Hunter game).
So, in my opinion CDPR is on a good way to recover. Let's see how this plays out. I am looking forward to any comments. As always, this is just my opinion and no financial advice. What do you think?
