GME Is Plunging Recently, GameStop Stock Price Is Currently ca. $94
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- GameStop stock stages a dead cat bounce on Friday.
- GME stock closes up nearly 4% on Friday as market freefalls.
- More losses are likely on Monday as momentum fades and meme is massacred.
GameStop (GME) managed to outperform the market significantly on Friday. The meme stock king closed nearly 4% higher at $106.36 despite the main indices closing sharply in the red. However, this was merely a dead cat bounce, and we will outline our reasoning below.
GameStop Stock News
Nothing too significant behind Friday's outperformance. GameStop (GME) shares had suffered eight consecutive days of losses. Statistically, an up day was becoming more and more likely. GameStop passed a few milestones without much fanfare or reaction from the stock price. Social media traders attempted to play up the one-year anniversary of the GameStop pop, and CEO Ryan Cohen joined in.
However, the stock slid. An announcement of a pivot into the NFT space was also met by indifference after a quick surge from the share price. Despite GME spending much of last week near the top of social media mentions, it failed to hook any buyers. The market has little time for risk at present, and speculative meme stocks are getting hit hard so far this year. As we have mentioned, this may be a good thing and avert a full-blown bubble bursting, akin to 2000.
The NFT announcement did see a brief pop, but that merely presented a fresh selling opportunity. Year to date, GME is now down nearly 30% and is likely to get worse. The main trading lesson of momentum trading is to get out quickly when momentum stops or stalls. This is not investing or buy-and-hold. This is the realm of quick scalping and risk control. Momentum has collapsed in retail names. Witness falling volumes, falling single share volumes, lower retail sentiment, and drastically lower call option volume: all signs of falling momentum.
GameStop Stock Forecast
$100 will be broken soon, possibly today or Tuesday. That will lead to some stop-loss triggering as people are herd animals and love round numbers. There will be plenty of stops sitting just below $100. $86 is the target thereafter.
The Relative Strength Index (RSI) still has more room to run before being overbought. Breaking $86 is big. That was the retest following the power surge higher back in February pf last year. Below $86 volume thins out, and there is a volume gap until $50.
GameStop (GME) chart, daily
