Take Two Interactive (TTWO) has made repetitive lower lows for a while and continues to be in a big downtrend. However, this stock has showed up on some of my scans this week and appears set to change direction. If it does start climbing from here, the stop can be set nice and tight so that the risk-reward is excellent. A return to prior highs would be a 40% move.
There are three things to note here. Firstly, the PPO is turning up. Secondly, the full stochastic made a nice double bottom. Thirdly, the price looks like it is breaking out above the horizontal support/resistance line. A stop would go just below here.
On a daily chart, TTWO has been right up against the downtrend line for 6 months. A nice pop here would really help. Notice the change in behavior on the PPO momentum indicator. This is the first trip above the zero line since the prior all-time high.
Checking out the 60-minute chart, I'm noticing a few things here that could help. TTWO has moved above a narrow Keltner channel and now appears ready to accelerate to the upside. Money flow has just turned positive; the PPO shows momentum improving and moving above zero here.
If the stock holds above the 94 level, this is a nice risk-reward entry. Today is a little euphoric, though, so a small pullback over the next few days might still give us a nice entry.
Good trading,
Greg Schnell, CMT, MFTA
