Retail traders’ favorite meme stock, GameStop (GME), is once again in the spotlight as it continues to experience heightened volatility in the market. After a significant surge in late April and subsequent sharp decline, the stock has been on a rollercoaster ride driven by social media buzz and unexpected news.
Following a three-year hiatus, social media meme-stock influencer Keith Gill, also known as ‘Roaring Kitty,’ made a post about GameStop, reigniting interest in the stock. This led to a rapid increase in GameStop shares before a steep decline as investors rushed to secure profits.
Recently, GameStop’s price has shown signs of upward momentum, with the 50-day moving average crossing above the 200-day moving average, signaling a bullish trend. The surge in trading volume suggests growing interest from retail traders looking to capitalize on short-term price movements.
Technical analysis reveals that GameStop shares have been trading within a symmetrical triangle pattern since mid-May, indicating a potential continuation of the current uptrend. By measuring the width of the triangle and projecting it from the breakout point, a price target of $95 is forecasted if the stock continues on its upward trajectory.
However, the unpredictable nature of meme stocks introduces the possibility of a breakdown from the pattern. In such a scenario, investors should monitor the $16 support level, where the price is likely to find stability near a multi-month downtrend line close to the 50- and 200-day moving averages.
GameStop surprised traders by releasing quarterly results and announcing a stock sale, leading to a sharp decline in its share price. The unexpected news caused the stock to plummet nearly 40% during regular trading hours and an additional 3% in extended-hours trading.
Looking ahead, further social media activity and comments from ‘Roaring Kitty’ are expected to impact the movement of GameStop shares in the coming days. Investors are advised to stay vigilant and closely monitor developments in this dynamic market.
