Don't pay dollar to keep 2 cents when wrong. Cut your losses quickly. Trade what you see, not what you think.
Joined Oct 26, 2011
719 Blog Posts

$TTWO takes two punches before speeding ahead

When I found out that $TTWO’s new Grand Theft Auto V (GTAV) game raked in over $1 billions in three days after launching, I was pleasantly surprise to see price actually softened instead of a spike up.  I was pleased because I didn’t have to chase the stock to buy it.

Take a look at the daily chart below:


Did you see how price kept bouncing off the 79SMA as well as the 89XMA?  When both 79SMA and 89XMA are coming close to each other, the support is even more effective per my observation. 

I was able to buy some at low $17.xx before people start to take notice that the revenues stream from GTAV has ONLY just begun (my opinion only of course).  There are still money coming in for the computer PC version that has yet to launch.  There are about 136 million units of current consoles of XBox 360 (59.4 million) and Playstation 3 (77 million) out there with only a little over 12% of these console owners who have already bought the GTAV (based on $1 billion dollars sales divided by $59.99 retail price).  With word-of-mouth going on how great the game is, I’m betting another 7-8% of the uncommitted console owners will eventually buy the game between now and X’mas time.

I’m not so sure about the sales on the new consoles XBox One and Playstation 4 since $TTWO’s Rockstar has not announced any plans to develop the game to support the new consoles.  But the lack of sales on these new consoles can be made up by the revenues stream from the online version of GTAV which will be launching in October.

Take a look at the monthly chart below:


From the monthly chart, you can see that there is a breakout from May 2011 high.  Remember, the longer the time-frame (monthly in this case), the more prominent is the breakout.

Can $TTWO restores its former glory by retaking $27.95 achieved back in 2008?  If the money keeps on dropping by $TTWO door with continuing sales of GTAV, I believe it can.

In other words, selling on news may be premature due to $TTWO surprisingly strong sales on its new GTAV game.

My 2 cents.


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