TakeTwo Interactive Software (TTWO) 2/9/10 PriceWatch Alert Support At Around $9.03

Posted: Tuesday, February 09, 2010 8:46 AM EDT
By: Market Intelligence Center Staff

TakeTwo Interactive Software (NASDAQ: TTWO) closed yesterday at $9.45. So far the stock has hit a 52-week low of $5.56 and 52-week high of $12.57. TakeTwo Interactive stock has been showing support around 9.03 and resistance in the 9.75 range. Technical indicators for the stock are Bearish and S&P gives TTWO a very weak 1 STAR (out of 5) strong sell rating. TTWO appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '11 7.50 covered call for a net debit in the $6.60 area. That is also the break even stock price for this trade. This covered call has a 347 day duration, provides 30.16% downside protection and a 13.64% assigned return rate for a 14.34% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the TTWO Jan '11 5 Call and selling the Jan '11 7.50 call for a $2.10 debit. The trade has a 347 day life and would provide 24.87% downside protection and a 19.05% assigned return rate for a 20.00% annualized return rate (for comparison purposes only). TakeTwo Interactive does not pay dividends at this time. [ATU-Seven Summits Research]