We reviewed Take-Two Interactive Software, Inc. (TTWO) in the middle of October, where we summed up our observations this way: "Bull moves are sometimes hard to reverse, but a three-month bearish divergence between price and momentum tells me to be more cautious. Raise sell stop protection to a close below $95."
Looking back at the price action since the middle of October we can see that our $95 sell stop was not elected even in the late November/early December correction. I will assume that traders and investors in TTWO are still long. Sell stop protection could be raised to a close below $100 now as that would be a new low for the move down.
In this daily bar chart of TTWO, above, we can see that prices gaped higher in November with heavy volume. Prices pulled back in late November and into December to break the rising 50-day moving average line. Prices have since rallied back above the bullish 50-day average line. The 200-day line is rising and well below the price action.
The daily On-Balance-Volume (OBV) is bullish and leading the price action. The OBV line has made a new high for the move up ahead of the price action and is foreshadowing a new price high, I believe.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line but the two moving averages that make up this indicator are close to a crossover and cover shorts buy signal.
In this weekly bar chart of TTWO, above, we can see that prices are comfortably above the rising 40-week moving average line. The weekly OBV line has been going up the past three years and signals that buyers have been accumulating shares of TTWO and have been more aggressive than sellers.
The MACD oscillator just crossed to the downside for a take profits sell signal. With prices strong, we could see another cross to the upside in the weeks ahead -- depending on the price action.
In this Point and Figure chart of TTWO, above, we can see the long and strong rally. Prices are in a bullish column and pointed up with a possible longer-term price target of $142.
Bottom-line strategy: Continue to hold longs with your sell stop now a close below $100. On a close above $120 aggressive traders could add to longs looking for further gains to around $142.