Take-Two Interactive Software (TTWO) was rated a new fundamental buy with a $127 price target by a sell side firm here on Tuesday. In my last review of the video game producer on Nov. 8 I wrote, "Jazz pianist and composer Dave Brubeck was known for his recording of 'Take Five.' It was a chance for band members to take a break and let drummer Buddy Rich showcase his skills. Traders of TTWO need to continue taking a break from the long side of the stock as further declines are anticipated."
Let's check the charts and indicators of Take-Two again to see what may lie ahead for the stock.
In this daily bar chart of TTWO, below, I can see that shares of TTWO bounced back in November and then stabilized around $100. Prices are still trading below the declining 50-day moving average line and below the declining 200-day line. The trading volume spiked in early November and then returned to a normal pace. The On-Balance-Volume (OBV) line has moved sideways from early November but remains in a longer-term decline. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of TTWO, below, I see a mixed picture. Prices made a large hammer pattern in early November but the hammer was not confirmed by a subsequent bullish candle. Prices continue to trade below the declining 40-week moving average line. The weekly OBV line has just made a new low for the move down. The MACD oscillator is bearish.
In this daily Point and Figure chart of TTWO, below, I can see a potential downside price target in the $87 area.
In this weekly Point and Figure chart of TTWO, below, I can see the same downside price as on the daily chart -- $87.
Bottom line strategy: TTWO could continue to trade sideways around $100, but I cannot rule out further declines with an $87 price target. I think the fundamentals bulls will need to wait for a while.
