05/26/2022
Once again, meme stocks are trending.
I guess it wasn’t enough that Melvin Capital was put out of business…
(Source: gfycat.com)
Now, our subject of the day yielded one of the best returns I’ve ever had on a pure stock play… over 3,000% in a year, in fact…
And this was before I’d even heard of WallStreetBets.
I bought based on technicals because the only thing that matters is the chart…
Today, we’re looking at GameStop Corporation (GME):
We’re zeroing in with a close look at both the daily and hourly.
Beware the volatility here as entry can make or break traders considering the wide range in which GME trades…
Daily first.
The first thing that jumps out at me is the support level at the green horizontal bar between ~$75.00 and ~$85.00. The previous touches here failed to break through and the most recent one popped right off of it…
The resistance levels are in red.
Since April, GME has been in a steady downtrend (white trendline), but the last week saw the share price sneak away before capping things off with a Bullish Engulfing bar, igniting the breakout on above-average volume.
You’ll notice today that the candlesticks are colored according to momentum which is yet another feature within the Squeeze Trading Tool 1.0.
(For my fellow technical analysis nerds, this is similar to Heiken Ashi candlesticks, although you get a signal when things slow down as the color flips yellow and you don’t lose the full averaging of each bar.)
And yesterday closed a massive green bar…
Using Chris’s tool, you can see where the histogram is rounding out to the upside on the lower chart.
The RSI and MACD are both headed upwards as well…
I expect a buy signal to print first thing today on the daily chart, so it could be worth looking at call options if the momentum continues.
As for the hourly, if you’re looking for entry, I marked the potential stopping points on a retracement.
There’s a sizable gap in the Volume Profile, but this is the hourly chart and we’re talking about a trade that defies most logic…
If GME resumes its meme-ish ways, I wouldn’t be surprised to see it run away on a “Gap-and-Go”.
Expect volatility and control your risk.
(Disclosure: I hold no position in GME but intend to initiate a position within the next 30 days.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
