Shares of Activision Blizzard (ATVI: sentiment, chart, options) have plunged more than 11% so far today, and the brokerage community is more than a little culpable for the decline. Earlier in the session, Merrill Lynch downgraded the shares to "neutral" from "buy," while UBS cut its price target on the stock to $15 from $17 per share. The moves arrive on the heels of a strong month for the video-game sector, as market research firm NPD reported that hardware and software sales spiked 18% in October on a year-over-year basis.

Furthermore, ATVI continues to print money with its World of Warcraft line of PC video games. The latest release in the series, Wrath of the Lich King, saw fans camping out for up to 24 hours, with the initial demand being so great that it crashed Blizzard's servers. Additionally, ATVI just released the latest edition of its wildly popular Guitar Hero franchise, with Guitar Hero: World Tour hitting the shelves late last month.

With the potential for a strong holiday shopping season lined up for ATVI, the aforementioned downgrades seem a bit counter-intuitive. That said, bullish sentiment is already heavy for the shares, as Zacks.com reports that 15 of the 17 analysts following ATVI rate it a "buy" or better. Given the poor market conditions and the grave economic outlook, a downgrade or 2 for the equity could be expected.

Technically, however, the shares are nearing a potential buying opportunity. With today's plunge, ATVI has pulled back to long-term support in the 10.50-11 region. What's more, the stock's 40-month moving average is rising into this area, and could provide additional support for the security. Look for the shares to rebound from this region, and trek back toward the upper level of there recent trading range near the 13-13.50 region in the coming weeks.