Take-Two Interactive Software, Inc. engages in the development, publishing, and marketing of interactive software games. Its products are designed for console systems, handheld gaming systems, and personal computers including smart phones and tablets; and are delivered through physical retail, digital download, online platforms, and cloud streaming services.
Take a look at the 1-year chart of Take-Two (NASDAQ: TTWO) with the added notations:
Back in December and January, TTWO had formed an important level of support at $120 (red). The market correction saw the stock break below that support. Not only did that imply lower prices for TTWO, but the $120 area will now likely act as resistance on future rallies, as it has several times over the past month.
The Tale of the Tape: TTWO broke a key level of support at $120. A trader could enter a short position on any rallies up to or near $120 with a stop placed above the level. If the stock were to break back above the $120 level, a long position might be entered instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT