|Instrument:take-two interactive softwre|
TAKE-TWO INTERACTIVE SOFTWARE
Take-Two Interactive software is one of the top publishers of games and interactive entertainment software in the world. With headquarters in New York, they have offices located in major cities all across the globe. The majority of software titles are developed and released under the Rockstar Games and 2K labels. It also publishes under a new brand called Private Division and releases mobile games and apps under the recently acquired Social Point label.
The company develops its games for major console systems, personal computers, smartphones, and tablets. In addition to delivering physical disks, it also sells products via cloud streaming services, online gaming platforms, and digital downloads. Even casual gamers are likely to recognise some of Take-Two’s most popular titles, which include Grand Theft Auto, the Sid Meier Civilization franchise, NBA 2K, BioShock, and Red Dead Redemption.
As of January 2020, Take-Two Interactive is the third-largest publicly traded game company in the U.S. and Europe. Sporting a market capitalisation of $13.9 billion only Activision Blizzard and Electronic Arts are larger. The Take-Two Interactive stock trades on the electronic Nasdaq exchange (NASDAQ: TTWO). It went public on April 15, 1997, at $3.6667 a stock. Considering the stock opened 2020 at a stock price of $123.00, you can see early investors have been well rewarded over the years.
Take-Two Price History
In fact, the early years were quite good for investors. After trading in a range of roughly $4 to $5 in 1997 and 1998, the price took off in January 1999, nearly tripling from the IPO price and reaching a high just above $9.00 a stock. After a pullback price remained range-bound again, but this time between $6 and $9 a stock. April 2001 saw the start of the first strong rally in the stock, and it travelled mostly higher, with occasional dips, eventually reaching a high of $27.78 in October 2003. Price then remained in the range of $18 to $25 through August 2005, which is when TTWO suffered its first real decline. The stock dropped from a high of $25.91 in August 2005 to a low of $10.34 a year later in August 2006. You can bet investors were extremely discouraged by that point.
Take-Two Buying Opportunity
That low was a great buying opportunity though, as stocks rallied off the August 2006 bottom and went right back to $25.75 by August 2008, more than doubling in 24 months. Sadly the stock then got hit by the financial crisis, dropping back to $5.57 a stock in February 2009. After that, the stock really took off, and aside from a 30% dip in 2012, it traded consistently higher. That 2012 dip also sparked the rally that lasted until January 2018, when stocks reached $129.25. That’s a return of more than 2,200% in just six years.
Take-Two Stock Volatility
Price action has been more volatile since, with the stock suffering a drop of roughly 25% in early 2018, and then another drop of roughly 35% in late 2018 after hitting its all-time high of $137.99 on September 28, 2018. As of January 2020, Take-Two’s stock is trading above $120 a stock.
How to Trade Take-Two
There are a few ways to trade Take-Two Interactive through AvaTrade South African’s new MetaTrader 5 platform. Many are based on technical analysis, but there is one fundamental trade that has historically given investors good returns, although that doesn’t guarantee it will work in the future.
The Console Upgrade Trade
Take-Two failed to make a new high for 15 months following the September 2018 high, even though the Nasdaq set 20 new record closing highs during that period. The reason is the consoles folks. The last major upgrade to platforms was in 2013, and Take-Two stocks rallied for 5 years following that cycle upgrade. All good things come to an end though, and that rally has simply run out of steam. The next console cycle upgrade is due around the middle to end of 2020. Both Sony and Microsoft will release new versions of their popular PlayStation and Xbox consoles. And these new consoles will come with better graphics, virtual reality, they will run faster, and there will be new games. Gamers won’t just buy the new platform then. They’ll also snap up the new games that go with these platforms, kicking off the next “super-cycle” for the stocks of game creators and distributors like Take-Two.
The TTWO Technical Trade
From October 2019 through January 2020 stocks of TTWO have remained in a horizontal trading band. That band stretches from a low around $118 to a high around $127.50. With trends like this, there is a high probability of the stock remaining within the trend lines, which means traders can look at the $118 level as a potential buying opportunity and the $127.50 level as a potential short selling opportunity. In addition to trading within the range, traders can watch for breakout moves. Any close above the current range would be a strong signal for an emerging uptrend, while a close below the low of the range would signal the possible beginning of a new downtrend.
Follow the Analysts
As of January 2020, there are 27 analysts following Take-Two Interactive stock, and 20 of them rate the stock a buy or outperform. The median price target for the stock is $140, which represents a 14.5% increase from the closing price as of January 3, 2020. An easy trade would be to follow the advice of Wall Street’s analysts. There’s no guarantee these analysts are right about Take-Two stock, but considering it is their job to analyse stocks for potential gains and losses you could do far worse than following their advice.
Stocks of Take-Two Interactive have been solid performers for most of the 23 years since the company went public. More recently we’ve seen a horizontal trading range for the stock. That gives traders the choice of trying to trade the tops and bottoms of the current range, or of waiting for a breakout to see what direction the next trend in the stock will take. Historically the release of new gaming console hardware by Sony and Microsoft has been the catalyst for multi-year rallies in gaming companies like Take-Two. There hasn’t been such a console upgrade since 2013, but in 2020 both companies will release new hardware consoles, potentially creating a great buying opportunity in Take-Two stock. AvaTrade South African clients can try to take advantage of this by trading TTWO on the new MetaTrader 5 platform. Plus, they will have access to hundreds of other popular stocks, making now a great time to begin trading with AvaTrade ZA and MT5.
AvaTrade ZA Take-Two Stock Trading Information
- Take-Two Stock Symbol: #TAKETWO
- Trading Times: Monday – Friday 14:30 – 20:59 GMT
- Country: USA
- Currency: USD
- Exchange: NASDAQ
Take Two Stock FAQ
Why should I trade Take Two Interactive Software stocks?
Gaming is an increasingly popular past time, and Take Two Interactive Software is one of the leading companies producing award-winning video games. With the COVID-19 pandemic giving the stock a huge boost in revenues and new customers it could become an even more powerful force within the gaming industry. That makes it well worth following for anyone interested in trading gaming or entertainment stocks. After trading in a wide range for two years the stock broke out in mid-2020 and is at the start of what could be a long uptrend as 2021 begins.
Is Take Two Interactive Software the best media stock for trading?
The gaming industry is full of smaller firms and independent publishers, which makes Take Two Interactive a dominant force in the industry. There are few companies of its size producing video games, which makes it a good choice for trading changes in the industry. Because gaming companies often rise and fall on the strength of their newest releases Take Two can sometimes be the best gaming stock for traders. Even when it’s not the best though it is still well worth consideration thanks to its tendency to trend strongly.
What’s the best strategy for trading Take Two Interactive Software stocks?
Because gaming companies are so reliant on their latest releases a fundamental strategy that trades based on new releases can be successful if the trader understands the gaming industry, and the wants and needs of gamers this can be a very successful strategy. Alternatively, a technical approach can be used that looks for trend reversals since Take Two stocks will tend to move in trends that last for several months, and if a trade can catch the beginning of these trends it can potentially be quite profitable.