Here’s the first take on Take Two Interactive ($TTWO) (January 06, 2020)
TTWO GNRC TTWO
I want to look at Take-Two ( NASDAQ: TTWO ). First of all, I was amazed at the number of stocks that were ripe to buy today and how strong, not really how strong the market is, it has been strong, I really didn’t see any reason for that to end. I am not a big fan of calendar trading and looking at the January effect or this or that or the other thing, that’s fine but I just look at charts. I know what market tendencies are but I just look at charts and fundamentals and stuff like that not really so much at calendars.
We have got a lot of stocks that are cranking today but with Take-Two ( NASDAQ: TTWO ), this is a stock that I saw today in some of my scans and if you know how I trade and my chart methodology you will see what is happening here, I have been kind of drawing it as I have been talking here. This is in a volatility squeeze; a nice trend higher but this actually peaked in the summertime. It is essentially in kind of a basing pattern for the last 5 months or so, 6 months, 5 months.
So I am looking at this and given the market strength, as much as it is, I think this stock can easily move another 10 points or so. That is not a huge percentage move but I am talking about easily. It is kind of a low-risk entry because you are taking a small position here in anticipation of the stock breaking out. Ideally, you are watching this stock, I wasn’t. Ideally, you would have been watching the stock, seen it pullback here and then hold at the 50 and then you are kind of buying the stock right here, starting a small position, keeping a stop that is less than 2 percent and then looking to add when the stock breaks out. So you didn’t do that, I didn’t do that.
Now we are looking at this today so we are a day late, maybe even 2-days late. But if the stock breaks out that is when you would start a position, you start a fairly small one. And again, I just like to start small; at least I like to preach starting small positions. And then keep a stop, just say, 2 percent, if the stock pulls back, say, to 123.00 or so, even though it might ultimately move higher.
The only reason you are buying the stock here, at least on my suggestion is because it is going to break out. So if it pulls back to 123.00 it didn’t break out so you need to sell it. You can wait and buy it again but you buy a stock because you think it is going to do a certain thing and then after you have bought it you wait to see if it does the certain thing that you thought it was going to do. If it does, awesome, you are making money. If it doesn’t, too bad, so sad, you get out and you move on and maybe you try it again.
Great traders can get stopped out of a position 2 and 3 times, lose money every time, and then ultimately make a lot of money on the stock. It is because they saw something that they thought was going to happen. It ultimately did happen but just not on the timing that they thought it was. Dave Ryan ( NYSE: GNRC )who is a monster trader mentioned last year at a workshop that I went to in Myrtle Beach, that he bought this stock back here and lost money on it like 3 times, until finally, the stock broke out and he did really well.
My point is, you should be treating Take-Two ( NASDAQ: TTWO ) and any other trade in the same way. You should know exactly why you are getting in and what is going to have to happen for you to be proven wrong, at which point you would get out. And of course what you are expecting the stock to do. If you can do all of those things I promise you, you are going to make money. And I can also promise you that you will never lose your butt; you will never blow out. You are always going to be a safe trader if you do the things that I just mentioned.
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