Shares of Take-Two Interactive Software ( TTWO ), Inc. are blasting off Friday. The company reported earnings and The Street loves them. At least for now.

The move higher may prove to be short-lived. This is why our trading team has made it our Stock of the Day.

There are a lot of old expressions on Wall Street. Some are worth paying attention to. One is “sell at former peaks.”

This refers to how stocks tend to run into resistance if they reach a price that had previously been a peak. As you can see on the chart below, Take-Two formed a peak in February 2021. It is getting close to that level once again and may soon encounter resistance.

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There can be resistance at former tops or peaks because of investment psychology.

Some people who bought at the top still hold their shares and have been looking at losses ever since. If they finally get back to around $215, many of these remorseful buyers will place sell orders so they can get out of their positions at breakeven.

If there is a large concentration of these sell orders, it could form resistance at the same price that had been a peak before. If some of these sellers start to undercut each other, it could result in a new downtrend forming.

Another popular expression is ‘the market has a memory'. This refers to how a price level that is important can retain its importance for a long time.

It could be weeks, months, or even years. This means that even though the peak around $215.00 occurred 5 years ago, the level may still be important.

A further issue that may be of concern to investors is that Take-Two filed a Shelf Registration. This gives the company the ability to issue and sell more shares. It means the management of Take-Two believes current levels may be a good place to sell.

And just like a retail investor, they wouldn't sell if they thought the price was going higher.

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