Take-Two Interactive Software Inc. (TTWO) announced their June-quarter results. Earnings of $0.27 per share beat consensus expectations by $0.23. Revenue of $422.24 million (46.45% growth year over year) beat by $65.59 million. The stock is trading sharply higher in early trading Tuesday.
Let's check out the charts and indicators.
In the daily bar chart of TTWO, below, we can see the sharp downside slide the stock suffered in recent days. Prices test the rising 50-day moving average line. The 200-day moving average line is bottoming.
The trading volume did not surge on the decline (compared to February for example) but the On-Balance-Volume (OBV) line does show a potential turn lower.
The Moving Average Convergence Divergence (MACD) oscillator is back to a take profits sell signal. TTWO is indicated around $123 in pre-market activity, which puts in back into overhead resistance.
In the weekly bar chart of TTWO, below, we can see a large potential top formation going back to August of 2017. TTWO may have made a "right shoulder" of this pattern. Prices are above the flattening 40-week moving average line.
Trading volume declined on the "right shoulder" and the weekly OBV line made a lower high in a decline that started back in early 2018. The MACD oscillator has been narrowing but is still bullish and above the zero line.
In this Point and Figure chart, below, we can see the price activity through Monday's close. A possible rally to the $123 area will not be an upside breakout. A trade at $126.18 would be needed. A possible downside price target of $101 is being projected by the software.
Bottom-line strategy: Tuesday's early trading looks strong but it may not produce an upside breakout. In this current market environment I would wait for more price action before going long.
