Take Five Before Considering Take-Two Interactive

Gaming firm Take-Two Interactive Software (TTWO)  has been rated a new "outperform" (buy) recommendation at Wolfe Research. Let's check out the charts and indicators of the maker of Grand Theft Auto VI.

In the daily bar chart of TTWO, below, I can see that share prices made a high in late November and have weakened into December. The shares are still above the rising 50-day moving average line and the rising 200-day line.

The On-Balance-Volume (OBV) line stalled in November and has weakened into December. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside signaling a "take profits sell signal."

In the weekly Japanese candlestick chart of TTWO, below, I see a chart that shows some potential price weakness. Notice the upper shadow on the candle in late November telling us that traders rejected the highs?

The shares have retreated and the OBV line has started to turn lower. The MACD oscillator is above the zero line but the oscillator has narrowed telling me that the trend strength has weakened. 

In this daily Point and Figure chart of TTWO, below, I can see a price target in the $217 area. 

In this weekly Point and Figure chart of TTWO, below, I see the same price target in the $217 area. 

Bottom-line strategy: Traders might consider taking five (apologies to Dave Brubeck) instead of buying TTWO at this point in time. The charts and indicators suggest a deeper correction to the downside is possible.

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