TAKE TWO INTERACTIVE SOFTWARE INC

102.67 -3.41 (-3.32%) Sell

TTWO is a falling knife, continues to bleed every investor trying to catch it

13 min read

TAKE TWO INTERACTIVE SOFTWARE INC was among the worst performers on Friday. It lost -3.32% to close at 102.67. On a day when the overall market breadth was 35%, it closed higher than 3% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing TTWO]

TTWO showed a strong down trend over the last 3 months. During this period TTWO lost -20.51% and saw a maximum drawdown of -26.31%. There were 4 short signals during this period that returned a cumulative of +13.03% to investors.

Trend

TTWO has been underperforming the SP500 index in recent time, after having outperformed till 28 Sep, 2018. Over the last 2 years 11 months and 3 days, TTWO outperformed the SP500 index on 52% days.

During the last three months TTWO was mostly loss making and delivered on average -0.31% per day. It's best return during this period (of +11.0%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -6.96%) was on Monday, 19 Nov, 2018. There was initially a bullish trend during this period which started on 20 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +3.78% to investors. This was followed by a bearish trend that started on 18 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -17.01% of investor capital.

TTWO had 6 profitable and 6 loss making months over the last year. During the last year, TTWO underperformed SP500 index on monthly return basis. TTWO significantly outperformed SP500 index in Aug 2018, when it returned +18.17% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. TTWO had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both TTWO and SP500 index significantly outperform during months when quarterly/annual results are announced.

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TTWO is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in TTWO's volatility from 10 Sep, 2018 to 20 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that TTWO has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in TTWO derivatives at this moment can consider 'Calendar Spread' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than TTWO. Therefore, SP500 must receive a lower allocation than TTWO in your portfolio. SP500 index usually has shorter drawdown period than TTWO.

On a general note (since you are interested in TTWO), three instruments that deserve special mention are PRQR, AMRN and NFEC. They have all outperformed the market and must be closely watched for investment opportunities.

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