- GME stock has pared most of its Wednesday losses and recovers 10%
- GameStop stock is down 45% this year and 60% in the past six months.
- GME stock rebounded around $10 from key support at $80.
Update: Despite a broader market sell-off on a classic risk theme, GameStop Corp. jumped about 10% to settle on a turbulent Thursday at $89.57. GameStop shares soared as much as 33% at one point during Thursday’s trading and rebounded to highs of $108.06. The high volatility surrounding GME stock has triggered a halt in trading on several occasions. The short squeeze in GME shares came as investors closed their short positions after the meme coin hit a two-month low of $77.77 as they sought to fund their margin calls amid a slump in the broader Wall Street indices.
GameStop (GME) holders are scarce now as the retail army is shrinking day by day. The current environment has totally changed and risky assets are not worth it. The Fed is largely responsible for inflating a huge risk asset bubble, and this could be the biggest asset bubble in history – Only time will tell.
GME shares are crashing in line with everything else, but the outlook remains incredibly bearish for the stock itself.
Find out more about stock market studies
GameStop Stock News
There may be a silver lining element as GME is oversold on both the Relative Strength Index (RSI) and the Money Flow Index (MFI). We may have a pop or bearish rally, but make no mistake, it’s not going to go to the moon anytime soon. Unfortunate moment therefore for the launch of “Diamond Hands, the Legend of Wall Street Bets” this weekend. Looking back, we can see that the pandemic shutdowns and massive stimulus from the Fed created the perfect environment for stock market cuts of epic proportions.
Now, however, the Fed has turned off the taps and stocks are hurting. Those who have won the most are the ones who suffer the most, and unfortunately GameStop is part of that group. We had data last month showing that video game sales were slowing. Now, with the Fed falling further and further behind the inflation curve, that spending is expected to decline further as inflation hits consumers’ wallets.
GameStop Stock Forecast
GameStop is fast approaching last key support at $78. This is the March low. If it’s okay, then $40 is the next realistic level for GME stock to target. Again, this is a key low as GME pulled back to $40 after the initial super high in January/February 2021. The series of lower highs continues. Even every peak fails at a lower level, as evidenced by the trendline in our chart below.
Now we have a modest silver lining as the RSI and MFI are oversold, so a rebound may not be out of the question. It might not look like it right now with too much bearish sentiment everywhere, but that’s usually when those powerful bear market rallies can happen. Any rally should be used to exit. GameStop is not a stock to hold.
GME chart, daily
Update: GameStop Corp. managed to recover on Thursday, despite the panic that gripped the financial markets. GME added 10.12% to settle at $89.57 per share, after flirting with the critical level of $80. The sell-off in stocks began at the start of the European session and extended into the start of the US session. However, US indices rebounded before the close, with the Dow Jones Industrial Average ending the day down 103 points and the S&P 500 ending the day down 0.21%. The Nasdaq Composite, on the other hand, added 6 points as the technologies recovered from their previous sell-off. AMC Entertainment was also able to post substantial gains, up 8.06% on the day, signaling renewed demand for meme stocks.
Like this article ? Help us out with some feedback by taking this survey: