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GameStop Earnings Preview: Here Are the Must-Know Stock Levels

GameStop is due to report earnings after the close. Let's look at the key stock levels ahead of the report.

GameStop  (GME) - Get Free Report has been the meme-stock and short-squeeze leader after the videogame retailer erupted higher a year ago.

Since then, the stock has tended to tread water, erupt and then pull back.

With earnings on deck for Wednesday after the close, it’s sure to attract investors’ attention. It could also have implications for other stocks, like AMC Entertainment  (AMC) - Get Free Report

The stock is wobbling a bit in early trading, as traders jockey for position for what could be a big after-hours move. 

Or perhaps it will be muted. That’s the thing with GameStop: It’s full of the unexpected.

The Grapevine, Texas, company has been tight-lipped ahead of the print, but the stock has not been quiet.

Shares of GameStop were trying to squeeze higher in late November, but suffered a 37% peak-to-trough decline. They fell in eight straight sessions.

Can the earnings report put the squeeze trade back on?

Trading GameStop Stock

Daily chart of GameStop stock.

Daily chart of GameStop stock.

In late October, GameStop bounced hard off the 200-day moving average and in November, it pushed over the third-quarter high.

It looked like it was about to squeeze, but then it lost steam. The same thing happened later in the month, too.

So now investors find GameStop stock sitting below prior wedge support, as well as the 21-day, 50-day and 200-day moving averages.

If the bulls want to see some sort of push higher, the first thing they need is for GameStop stock to close over all these measures. Staying below them will keep the ball in the hands of the sellers.

On the plus side, GameStop is holding the 50-week moving average, but it will need more catalysts than that if the stock is to gain some momentum.

A move over $195 is good, but over $200 is better — especially if GameStop can close above that mark.

That could open the door back to the $250 area, which was a double-top area last month.

On the downside, we don’t want to see GameStop stock lose the December low near $159.

If it does, it technically leaves the third-quarter low of $145.69 vulnerable to a test. A break of this level could put the mid-$130s in play, followed by the $116 to $118 area.

Keep in mind, this stock is incredibly volatile and earnings can sharpen that move. Know the levels and let’s watch which way this one goes.