Source: StockCharts.com RT will expound on this more over the weekend, but I just wanted to address a few e-mails regarding the TTWO trade. Above is a chart, highlighting the movements as of late. The new trend (channel highlighted in blue) shows that the old trendline (red highlight) has been broken and we are on our way on a "up" trend. In addition, the RSI (Relative Strength Index) is at 56.13, and is also on a upward trend. The RSI, for a given stock, ranges between 0-100. Any stock with a RSI below 30 is to be considered "oversold" and any stock with an RSI above 70, is to be considered "overbought". Hence, the channel boundaries in the RSI section of the above graph. In addition, we are above the 50 day MA (Moving Average). MA's are a nice tool to use when evaluating trends. When the price is above the MA, it highlights an upward trend. On Friday, we hit great another great day, holding above the 50 Day MA; however, volume was light, only about 860k shares traded, compared to the normal average of 1.5M.
As for exit points, I look at the RSI. More importantly, I will keep an eye on a few price points. $7.78 seem likes the next test and if we blow through that, as well as the $8.30 high on Feb.10th, I think we have a good chance of going to $10 (given we have a fair market).
We've had a nice run since the write up on Wednesday night, up 15.67% since Thursday morning. Hopefully this will give you somewhat of a "guide" and as a someone once told me "you can't go broke by taking profits".
RT will be back later with his Analyst "hat", highlighting the fundamental scope of TTWO, I am looking forward to reading it.
Update II: Wedbush Morgan Analyst Upgrades TTWO 3/6/09
GREAT WRITEUP RF, THANKS FOR REPLYING. I OWN THE NAME AS WELL BUT I THINK TTWO STILL CAN GET BOUGHT. I DIDN'T UNDERSTAND WHY MANAGEMENT DIDN'T TAKE THE HIGH OFFER FROM ERTS BUT I THINK ERTS OR EVEN ATVI CAN GO TO THE TABLE WITH THESE GUYS, YOUR THOUGHTS?
ReplyDeleteYour dead on brother. ERTS offered $26 a share ($2 billion) for TTWO and I have NO idea why management didn't take it. Now at $7 a share, I believe they would take anything. With nearly $3 in cash per share, it has a very cheap valuation. Also, ATVI's CEO said on Bloomberg that he is "looking to fill the gaps in their product portfolio". I defintely think its possible and with $3 billion in cash, ATVI could buy them outright with no financing.
ReplyDeleteNice article RF.
ReplyDelete