Gamestop Stock – GME in sight of key $231.94 resistance but RSI overbought
- GME shares are back to loving volatility with an explosive move.
- GameStop rumoured to be starting a Non Fungible Token (NFT) platform.
- GME set for further gains with Wednesday’s premarket indicating higher.
GME, AMC, KOSS it is like January all over again with some stellar gains on Tuesday. Bitcoins’ recent struggles have definitely seen some retail traders switch attention back to their favoured meme stocks but some key technical levels and news flow has certainly helped. AMC results were poor, but a cash raise and strong attendance numbers helped the stock to strong gains over the last number of sessions and GameStop shares are not to be left behind. GameStop (GME) shares surged over 16% on Tuesday to close at $209.43. The gains look set to continue on Wednesday as GME is trading at $219 in the premarket. The catalyst appears to be news that GameStop is launching a Non Fungible Token platform.
GameStop is or was a struggling brick and mortar retailer that caught the attention of the wallstreetbets forum and saw shares surge as retail investors battled short sellers in an epic that is due to be made into a blockbuster movie. A nice tie-in with AMC there.
GME stock forecast
The moves in GME have been nothing short of incredible and must be a nightmare for volatility traders to hedge. But GME has actually been displaying some nice technical viewpoints from which traders can trade around and use key levels to manage their risk. Gamestop has been holding the bottom trendline of the triangle formation since mid-March. GME did stage a false breakout or a bear trap before rallying back and using the trendline repeatedly to find support. The fact that this has corresponded to the 9-day moving average makes for a nice confluence of support factors, always reinforcing. Resistance at $231.91 is next in the crosshairs for GME bulls, this is the March 17 high. The move may struggle to continue with the same explosiveness going forward as the momentum oscillators are both close to or in overbought territory. The Relative Strength Index (RSI) is close to overbought and the premarket move has likely ticked the RSI into overbought territory. The Commodity Channel Index (CCI) has traded into overbought levels. GME remains bullish until a break of $136.50 so there is plenty of room for consolidation without hurting the bullish formation of higher lows and higher highs. Shorter-term the bullish trend is held in place by the 9-day moving average, curently at $179.
|Support||179 9-day MA||175 trendline||136.50 May 11 low||116.90 March 25 low|
|Resistance||220 trendline||231.94 March 17 high||283||348.50||483|
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