Take-Two Interactive (TTWO) reports quarterly results after today's close. The company is expected to post 90 cents per share in adjusted earnings, with revenue topping $1.6 billion. These results come just before the highly anticipated Grand Theft Auto VI, set to release November 19th. The last game in the franchise came out 15 years ago, so GTA VI is a major piece of the company's future.
Chart and Trend Read
TTWO is down about 8.2% on the year (purple line). That is close to its sector, communications, the XLC ETF, which trails the S&P 500 but is up about 8% on the year. Inside the video game group there is wide spread: Roblox (RBLX) is the worst performer, while Unity Software (U), a game-engine and creation software maker, sits at the top. Take-Two is in the upper part of the group but still trails the broad market. These large, complex games take as long as they take to build.
On the yearly chart, the old high is 265.94. Connecting that close to the later, lower close forms a longer-term downward trend line - about where the stock topped out recently heading into earnings. There is also a steeper upward trend line starting from the 52-week lows just below 184. So two trends pull against each other.
Key levels: recent highs at 219 and 225 are points to beat on the upside. On the downside, a small gap near 197, a repeated floor near 189 (the green line) that was breached intraday but held on a closing basis - a mixed but better-than-worst signal - and the 52-week low at 183.86.
Moving Averages and Momentum
The 251-day exponential moving average (one year, orange) comes in at 221. That is the longest-term and most important average, and it has not yet been overtaken. The stock has crossed above its three shorter averages in rapid succession after bottoming at the 52-week low: the 5-day (dark blue), 21-day (one month, teal), and 63-day (one quarter, gold). The faster averages are starting to cross above the slower ones, which normally signals a trend change. That signal carries less weight here because earnings can quickly and strongly change a stock's fundamentals.
RSI has been improving, which is unusual - it often stalls heading into a known event like earnings. RSI is above the 50 midline and trending up. A confirmatory bullish setup would need a break above the trend line, a break above the last moving average (221), and RSI making new relative highs along with price.
The volume profile shows the point of control - the heaviest trading area - at 212.50. Recent volume spikes mark this as a key zone the bulls want to hold.
The Options Trade
Last week, while most major averages fell during market turmoil, TTWO gained 13%, possibly ahead of the GTA VI release. Two catalysts sit close together: earnings tonight and the game launch on the 19th. Pre-orders for GTA VI already top 7.7 million, which equals roughly $751 million before the game is even out.
The trade here is directionally bullish and needs an upside move. Rather than a pure earnings-day play, it goes one week further out to the November 20th monthly cycle - 11 days in the position, capturing both earnings tonight and the GTA VI release on the 19th.
The structure is a $25-wide call vertical: buy the slightly in-the-money 215 strike call (the bullish piece), and sell the 240 strike call against it to offset cost. Cost is about a $9 debit, so risk is $900 per spread. The break-even sits at 224, only just over 3% above the current share price. The option market is pricing a one-day move of about plus or minus $11, roughly 5% in either direction, so that 224 break-even is well within the expected one standard deviation move.
Risk is $900 to make $1,600 if TTWO closes above 240. The 240 short strike was chosen because the option market prices about a plus or minus 27-28 move into the November 20th cycle, so 240 lines up with that expected range.
