Technical Analysis and Market Entry: Take-Two Interactive Software (TTWO) – Bulls are on The Loose

  • Take-Two Interactive Software (TTWO) is on a decent recovery run after a breakout from narrowing triangular structure.
  • The TTWO share price looks attractive from current levels ahead of the stock’s quarterly earnings report on 13th May.

TTWO: Recent Price Behavior

Take-Two Interactive Software shares are well and truly back within the bulls’ control. The price has been rallying for the past three consecutive weeks, jumping to the highest level seen since February 2018. Momentum to the upside picked up at a decent pace after running at four weeks of losses over March-April.

TTWO bulls are on the right path to recovery, following the heavy beating incurred at the back end of 2018. The price entered a steep bear market in October 2018, after the all-time-high print up at $140. It dropped a whopping 40% from the noted highs, down to $85, which at the time was the lowest since August 2017.

At the start of 2019, the stock continued to edge south, and only in the past few weeks has it managed to stabilize. Price action began to narrow considerably within somewhat of a triangular structure, which was subject to a breakout. The bulls’ managed to force the escape, seeing a weekly closure above that structure to then be followed through by further buying pressure in the latest week.

TTWO weekly chart.

Quarterly Earnings Report

Take-Two Interactive Software is due to report quarterly earnings after the closing bell on Wall Street Monday 13th May. General street expectations are for the company to post earnings of $0.78 per share; should this be the case, EPS will grow 13% year-over-year. The stock reported earnings per share of $0.69 in the same quarter last year. In terms of revenue, it is expected to be $507 million, which implies a 23% growth rate year-over-year.

One of TTWO’s top peers, Electronic Arts (EA), rose on Wednesday following the reasonable strength of the company’s fiscal fourth-quarter results and satisfactory fiscal 2020 outlook. While fourth-quarter sales fell year-over-year, they still beat the Wall Street expectations, and revenue projections for the year ahead were more upbeat than analysts had forecast. As covered in the prior recommendation, EA looks like an attractive addition to a portfolio.

Trade Recommendation

A buy from the current price of $101-$102 is attractive, given the recent technical range breakout and earnings prospects. The first target area of interest is $113; further north a retest of the all-time-high up at $140 territory should be eyed. Stops should be placed just below the supporting trend line of the breached triangular structure, $90.

 Featured image courtesy of Shutterstock.

Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.