One of my favorite methods of buying securities is using what I call 'Guerrilla Trading', when a stock has taken a huge beating and its been left for dead, enter the 800 lb. Gorilla.  This isn't taking a chance on a falling knife, rather, identifying a stock that you've been hunting from afar then when the moment strikes, you swing in from the jungle vine.

On June 10th, I picked up 300 shares of Take Two-Interactive (NASDAQ:TTWO) at $8.13 shares as they were heading down, finally stopping at $7.52 on June 16th.  I took a chance it could keep going, but my educated analysis lead me to believe this stock was due for a type of bounce I like to call the Guerrilla  Bounce.  Enter Guerrilla Warfare, which means "sudden unexpected attacks carried out by an unofficial military group or groups that are trying to change the government by assaults on the armed forces" or in this case, take the money and run.  The Guerrilla Bounce is mean and tough and its not fair to all that bailed out on the way down, scared they would never recover their losses -- welcome to stock trading in 2009.

It pays to hunt and be patient, after watching the market collapse since late 2007, this trading technique has worked well for me.  You can't chase after just any stock, it needs to be a stock that you know, one that you have followed for months if not years, a company/stock you've bought in the past and are comfortable with trading.  I picked up an additional 300 more shares as the stock has been rallying, testing my entry point because I believed the stock should be trading around $10.

NotableCalls is a respected blogger that's been around for years that specializes in this trading technique, he posts stocks like this almost daily, to read his blog - click here.  For those of you that have followed me at theStockMasters.com since 2006,  spotting a stock like TTWO at its weakness comes as no surprise.  Good for me right, so you're asking besides just looking at a stock bottoming from a technical perspective, what else should you consider, why take a chance on it now, couldn't it just fall further?

There comes a point in time, almost too often these days that despite how poorly run a company may be, they have assets and products that speak louder than the company stock price.  Take-Two Interactive is a company that has been plagued by terrible management, they also gave up a chance to sellout to Electronic Arts (NYSE:ERTS) for $28 to $29 a share in 2008.  The stock is a roller coaster, the share price swings on news of consumer spending, other game makers earnings & news, and of course monthly game sales figures reported by the NPD Group.

Take into consideration the 200-Day, 50-Day, Short Interest, (type the stock into shortsqueeze.com for this data - click to go there) and can you justify why the share price will bounce back, is it reasonable to assume or have you just found another falling knife?  If you decide to buy, at what point will you exit, if it does fall, how much are you willing to risk before the stock rebounds? 

Take-Two had more going for it than the Street was willing to credit them with, GTA Sales (Lost & Damned, Chinatown Wars ), Mafia II, BioShock 2, Rockstar Studios, 2k Games & Sports, etc.  Add to it that what if Electronic Arts or another company makes a low ball offer for a Take-Two Takeover? Why not, buy the company for $10 a share, instant 10% gain in a single day, its possible.  There were plenty of reasons why I thought the stock was poised for a comeback and I was willing to throw down the cash and place my bet (glad I did).  Then of course like clockwork an analyst upgrade came in today (July 2nd) by Kaufman raising the target price from $8 to $14 because there's no way a stock can jump 20%+ and not have an analyst covering it look like an ass for now justifying the move.  I will most likely exit my TTWO position in the coming days, after all, a 20%+ gain in 15 trading days is good enough for me.

On this blog I will (AWD Investing Blog)  keep readers informed of potential Guerrilla Trades and detail why I'm getting into the stock and when I plan to get off.  Happy Safe Investing and thanks for reading.

Disclaimer: Long TTWO until $10 a share.