Take-Two Stock Could Extend Its Run Higher Next Month

TTWO has been one of the best stocks to own in August over the past decade

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) stock has been making a beeline higher since bouncing from the $88 region in mid-April, up more than 39% atop support from its 10-day moving average. The shares could be headed even higher in the near term, if past is precedent, considering TTWO has been one of the best stocks to own on the S&P 500 Index (SPX) in August over the past decade.

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, TTWO stock has finished the month of August higher in seven of the past 10 years, averaging a gain of 5.73%. Based on its current perch at $122.56, another move of this magnitude would put the shares back near $129.50 for the first time since early November.

The video game stock could also get a boost on another positive earnings reaction. Take-Two Interactive Software is slated to step into the earnings confessional after the market closes next Monday, Aug. 5. The equity has closed higher the day after earnings in five of the past eight quarters, including a 3.5% pop in May and a 9% jump one year ago.

A shift in sentiment from bearish traders could create bigger tailwinds for TTWO stock, too. At the International Securities Exchange (ISE), Cboe Volatility Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 0.60 registers in the 71st annual percentile. So while calls have outpaced puts on an absolute basis, the elevated ration shows the rate of put buying relative to call buying has been accelerated.

Elsewhere, shorts have already started to throw in the towel, with short interest down 17% in the most recent reporting period. It would take bears roughly three days to cover the remaining 3.5 million Take-Two Interactive shares still sold short, at the average pace of trading, pointing to more cash sitting on the sidelines to fuel additional upside.