Saturday, August 15, 2009

Take-Two Interactive Software TTWO

Take-Two Interactive is a video game publisher. The stock trades at about $10, with about $2 cash/sh. The fundamentals are a bit troubling because the company has negative earnings and industry-wide game sales are sharply lower than last year due to the recession and the lack of blockbuster title releases. New game releases and reductions in console prices may lead to improved sales for the game makers this fall. But for me, TTWO is strictly a breakout play. As the chart below shows, TTWO broke through and closed above its $10 resistance on August 13th. It currently trades above its 10, 50, and 200 DMA. I took a long position based on the technicals, and will sell if the breakout fails and it closes below the $10 support level.

Update (August 27th): The breakout still looks good despite continued bad news from the sector. TTWO earnings release is next week, and I don't want to guess on the outcome so I locked in the profit this afternoon.The chart is updated as well.

TTWO Trading History
August 13th, bought TTWO for $10.18
August 27th, sold TTWO for $10.69 (+5.0%)

Current Position:

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