After seeing the ascending wedge form recently I noticed that it could be considered completing a reversed cup and handle pattern.
We also just had MACD cross down on the signal, but I could see it oscillating in the wedge a bit longer before breaking out.
We see some bearish signal in weekly chart plus today's 6% drop may suggest bearish brutal free fall that started early this year may continue but for now target price $35 area.
Stock came from $16 to almost $58 in year and a half but was sold off on bad earnings results almost 2/3 of it is initial move up. In such a strong tape I think it looks ready for move higher, as it found support at $33 and have built higher highs with consolidation support at $35-$36. It broke downtrend line to the upside with strong, green candle and building...
Fundamentally this company is looking quite grim.
As an avid gamer, i know (as do most) the future is digital downloads. There is no reason for a company like this to be the "middle man". As much as I like owning a physical copy of the games, I'm a minority. Most people are lazy and want gaming on demand. Its like vinyl records.
Gamestop is quite reminiscent of...
Everyone downloads games anyway now...
This is just speculation based on my elliott wave count. We may have a tiny pop up to 42 area or so, but we still have a long C wave down after that so it doesn't really matter. Earnings are tomorrow which is interesting, my guess is they will disappoint.
The overall trend is down so I would need to see a strong push to break this trend. It has ramped up this last month but is closing in on resistance. Hourly charts would probably be the safer play for longs but don't be afraid to get out if it closes below 36.
As the days march on it will be pinched off and be forced to move one way or the other. Time will tell....
pros:
Playstation 4 sales great
XBOX One coming out
Call Of Duty Ghosts
GTA V broke industry sales record
Holiday season approaching
women gaming population increasing
Cons:
Holiday sales rev AFTER earnings
games getting pushed back
potential downfall in economy
luxury item, not essential
Ebay and Amazon
GME consolidation after a big move up, ready for a breakout of the flag. If it breaks watch movement through the 3 swing points I highlighted at $51.36, $53.29 and 52 week high of $56.08. Also supported by its 50 dma in today's session.
Gamestop is on an up rampage. It has been going North since August of last year and is in a cosolidation phase. Support for this phase is 48.65 and the upper end of this range is 53. Buying near support will minimize your risk.
HAPPY TRADING!
