On alert for a GameStop pop

Let’s be clear. I’m no ape. I’ve worked for the biggest investment banks, international brokers and global trading platforms. If anything, the mouth-breathing inhabitants of the Supertstonk thread and all those chicken-tender eating followers of Roaring Kitty would consider me the enemy. I briefly investigated the $GameStop (GME.US)$ / $AMC Entertainment (AMC.US)$ phenomenon years ago, and moved on. But now the chart of GameStop is calling to me.

Here's the daily chart:

GameStop - Daily

Two strong days in a row have GME moving towards a potential break out point at $34.40. A push through that resistance could spark a significant move higher. Although past performance is not a guide to the future, previous GME break-outs have escalated sharply, often collapsing just as quickly.

The stock is widely held and closely watched. This is what makes it a difficult trade. Any sharp moves could bring swift reactions. A trader looking to profit from any break-out may have to move quickly, despite the often-made claim that the apes are “diamond-hands” ie long term holders.

It seems this one stock has been the subject of more rocket emojis (“to the Moon!”) than all other stocks combined. It’s the ultimate retail stock, and has a very special cohort of shareholders. The yellow box shows a failed attempt to break higher in March, with a market leap turning into a rout. The more consistent gains over the last two sessions are more impressive.

How will these smooth-brained stock traders react if GME does break above $34.40? Rallies on the charts look as if sellers initially held off and then scrambled to sell once a fall began. A big push on strong volumes may see the share price reaching for previous highs around $49, $64 or $86. For better or worse, fundamental valuation appears to have little impact on where GME trades, making predictions even more difficult.

How high can $GameStop (GME.US)$ go? We may be about to find out.

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