VictorCobra

GameStop (GME) Falls At Heavy Resistance - Squeeze or Dump?

NYSE:GME   GAMESTOP CORPORATION
Just posting this chart by request. I've been following GameStop for a while. Michael Burry bought a large position over the past year, yet price continued to head to new lows. Meanwhile, a trader I know made an observation of share price's reaction to major console releases. I was a bit skeptical of the bullish argument at first, but clearly it turned out to be correct in the medium term. I will explain why, a little further down.

This chart shows some important trend lines . I'm using the monthly chart because GME has a relatively long price history, and the 50 Month MA (red) seems rather important. The trendlines in this chart I actually drew many months ago. One of them served as resistance on the recent move.

If GME can head back up this week and sustain above that first teal trendline and the 50 month MA, there is the possibility of an enormous short squeeze. On the other hand, if price rolls back below the first red downtrend line, it can easily dump back to the lows.

This isn't an attempt to predict where price will go next, but just to outline the structure of this stock. In the broader picture, video games have actually gone up in demand over the last year. With much of life being relegated to the home, entertainment has become even more vital. Retro games are also selling at much higher prices than before the pandemic. Especially if fiscal policy continues to favor a weakening dollar, we can see some fairly ridiculous price action on equities for a little while until an inevitable bubble pop. For GME , if price breaks and holds the $13-14 resistance again, we can see $29-30 fairly quickly. If it breaks above all my downtrends, it can even reach a new all-time-high, as ridiculous as that sounds. This is not financial advice! This is for education, entertainment, and speculation only.

-Victor Cobra

Comments

Very very interesting, thanks for sharing ;)
+1 Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out