Shares of GameStop (GME) - Get Report  were pummeled on Wednesday, closing lower by 9.82% at $4.59 in midday trading.

The good news? GameStop stock is rallying hard off the lows, currently at $4.46 after trading as low as $3.97. The other good news is that, despite breaching the $4 mark, shares are still notably above the 52-week low at $3.15.

The bad news is much worse, though.

Shares are down more than 63% so far in 2019 and more than 70% over the past 12 months. Over the last three and five years, GameStop stock is down ~83% and ~89%, respectively.

It appears that GameStop is yet another retailer that's seeing a disastrous decline in its stock price as investors worry about its long-term viability. It's not unlike what we saw in Sears (SHLD) or what we're seeing in J.C. Penney (JCP) - Get Report now.

The company is closing stores, has cash flow issues and the latest quarter didn't do anything in the way of inspiration. The company missed on earnings and revenue expectations and provided below-consensus guidance for both earnings and comp-store sales growth.

To say GameStop is struggling puts it lightly.

Trading GameStop Stock

Daily chart of GameStop stock.

GameStop stock opened at $4.19, just above its 20-day and 50-day moving averages. By holding $4 on the downside and reclaiming these key moving averages, investors at least have a line in the sand to measure against.

That is, below the 20-day and 50-day moving averages is certainly a concern, while a close below $4 puts the 52-week lows back on the table.

So long as GME stock is able to maintain above these key levels, though, a rally to $5 resistance is possible. It's hard and risky to short a stock that's down so much in such a short period of time. However, it's also hard to be a confident buyer in a name like GameStop when looking at the longer-term trends.

If bulls really gain upside momentum, the stock will take out the $5 level and downtrend resistance (purple line). In this scenario, it could fill the June gap back up toward $7.50.

Still, it's hard to bank on such price action given the fundamental developments. Those who feel the need to be invested in GameStop stock should watch the 20-day and 50-day moving averages. Above is OK, while below threatens lower prices.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.