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Take-Two Interactive Overbought, Trading at a Discount

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Shareholder returns and stock trends

US-based (SPY) Take-Two Interactive Software (TTWO) generated investor returns of 54.8% in the trailing 12 months and 13.1% in the trailing one month. In comparison, it generated 24.3% returns in 2015, and the company’s share price rose 5.1% in the trailing five days. Since January 2016, TTWO’s share price has risen 32%.

Among Take-Two Interactive’s peers in the gaming space, Activision Blizzard (ATVI), Zynga (ZNGA), and Electronic Arts (EA) generated returns of 94%, -5.5%, and 46.2%, respectively, in 2015.

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Moving averages

On September 21, 2016, Take-Two Interactive Software (TTWO) closed the trading day at $46.34. Based on this figure, here is how the stock fared in terms of its moving averages:

  • 16% above its 100-day moving average of $39.63
  • 10.5% below its 50-day moving average of $41.95
  • 6% below its 20-day moving average of $43.72

Moving average convergence divergence and relative strength index

The MACD (moving average convergence divergence) is the difference between a company’s short-term and long-term moving averages. TTWO’s 14-day MACD is approximately 0.84. This positive figure shows an upward trading trend.

The company’s 14-day RSI (relative strength index) is 66, which shows that the stock is slightly overbought. Generally, if the RSI is above 70, it indicates that a stock is overbought. An RSI figure below 30 suggests a stock is oversold.

Analyst recommendations

Out of the 16 analysts covering Take-Two Interactive Software, 11 have a “buy” recommendation and five recommend a “hold.”

Analysts’ stock price target for the firm is $45.29 with a median target estimate of $45.50. This means Take-Two Interactive is trading at a discount of 1.8% with respect to the median analyst price target.

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