Software Stock Could Be a Smart Long-Term Bet for Bulls

Video game stock Take-Two Interactive Software Inc (NASDAQ:TTWO) is trading 1.5% higher at $209.29 this afternoon. The stock's September pullback found support at the $200 level, and while the shares have been struggling to stage a meaningful rebound, a historically bullish long-term trendline could signal more upside ahead.

Per Schaeffer's Senior Quantitative Analyst Rocky White, TTWO is trading within 3% of the 40-month moving average, after closing above this trendline every day for the past five months. This setup has occurred four other times over the last 20 years, after which the stock was higher three months later 75% of the time, averaging a 9.3% gain. From its current perch, a move of the caliber could put Take-Two stock back near $230 by early 2027.

Although calls still outpace on an absolute basis, puts have been more popular than usual in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX), TTWO's 50-day put/call volume ratio of 0.44 ranks in the 94th percentile of its annual range. An unwinding of this pessimism could provide additional tailwinds for the stock.