Take-Two Interactive is Up 30% in Less Than a Month...Time to Buy?

For everyday traders looking to gain a quantified trading edge, you have 2 basic choices: PowerRatings (for Traders) or TradingMarkets Indicators. Let's focus on the Indicators for today.

TradingMarkets Indicators provide traders with quick access to an overall market snapshot. The Indicators are broken down into two different categories: Bullish and Bearish.

The main premise underlying these tools is that extended market conditions will usually revert to the mean. If the market rallied like gangbusters for the past week, the odds are that overall market conditions are overbought, and over-extended, and history tells us that the market will sell-off to "get back to normal." Similarly, if stocks have sold off for the past week, market conditions are probably oversold and extended, so traders should be looking for the mean-reverting bounce.

If you understand this simple, underlying concept (reversion to the mean), then the TradingMarkets Indicators opens up a whole new way to look at the market. Let's take a look at one of the Indicator pages.

Here is a screenshot of today's list of stocks which have made new highs for 5 or more consecutive days.

These stocks are extended and overbought. Our database of literally millions of trades points to the historical fact that extended stocks usually revert to their mean. An oversold stock will tend to bounce, and an overbought stock will tend to fall in price.

Here is a chart of Take-Two Interactive Software (NasdaqGS: - ) , which has a PowerRating (for Traders) of 3.

TTWO has rallied more than 30% in about 1/2 a month. History proves to us that these types of rallies are not sustainable forever. TTWO will eventually pull back from its extended, overbought levels; this stock will not rally into infinity.

Use TradingMarkets Indicators to find and exploit these edges, every single day.