Only this time, GameStop isn’t the leader of the meme-stock movement. One could argue that the crown belongs to AMC Entertainment (AMC) - Get Report, while a whole host of new stocks has been thrown into the mix.
GameStop stock has been jumping around a lot lately, but apparently the quarterly report isn’t doing much to spark a squeeze higher.
The company reported a loss for the quarter, while a looming Securities and Exchange Commission probe has investors opting for a conservative stance rather than an aggressive one.
What do the charts look like after the post-earnings fade? Let’s look.
In late May and early June, GameStop stock traded up to the $280 to $300 zone. That was after a breakout over the $210 to $215 area.
However, this zone continued to act as resistance, just as it did back in March. While GameStop was able to break out over $300, it didn’t do so in a convincing fashion.
By that, I mean its rallies into the mid-$350s were unable to last throughout either Tuesday or Wednesday’s trading sessions. They both faded back toward the $300 mark.
While shares were technically above $300 resistance, there was reason to be hesitant on the long side. At the same time, it’s clear what a bullish reaction could have done to this stock, putting $350-plus in play.
Currently, we’re getting the first correction to the 10-day moving average in 11 sessions. While this moving average has been guiding the stock higher, it hasn’t been tested since GameStop’s massive breakout over $212.
Now that we’re there, aggressive bulls may look for a bounce. If we get it, the $280 to $300 zone has to be on watch. Admittedly, it’s a wide zone, but one that must be respected.
If GameStop stock gets above $300, the $345 to $350 area could be in play after that.
On the downside, keep a close on the 10-day moving average. A close below it could put the 21-day moving average on the table. Below that and the $212 breakout level will be back in play.
The levels for GameStop are not that hard to figure out. It’s the emotional baggage that comes with trading such a volatile stock with wide ranges. In that sense, this stock certainly is not for everyone.