GameStop Stock News and Forecast: GME rockets nearly 17% to start week

GameStop (GME), the embattled videogame retailer and original meme stock, has surged 16.7% in the first ten minutes of trading on Monday as shares made it up to $32.88. This is somewhat surprising as all three major indices started off the week lower between -0.3% and -0.7%. However, it appears as if the stock was halted at that price, and afterward the share price began to melt lower.

GameStop stock news

This price action is significant because of what meme stock enthusiasts know about the $30 level. The CEO of S3 Partners, a data analytics firm, went on CNBC on Friday to talk about murmurs regarding another short squeeze in the works for GME.

In response to a question from announce Brad Smith about whether there was enough short volume to allow for another squeeze, CEO Bob Sloan was resolute: "If you look at GME, I think there's still $1.2 billion short in the stock. If this stock goes past $30, you could see something parabolic."

It is thought that at least 20% of the public float is currently shorted. AMC Entertainment (AMC) also shot up more than 10% after the opening bell in tandem with GME.

GameStop fans were already buying up shares last week after a picture of Carl Icahn with GameStop chairman Ryan Cohen began circulating and leading to bullish rumors. Some short squeeze aficionados speculated that Icahn was soon set to announce a stake in the retailer. This will be an interesting saga to watch as the week unfolds since most of the market is entirely focused on Wednesday's FOMC meeting and press conference. Bulls are holding their breath that Federal Reserve "pivot" language will unleash another bear market rally.

For now, traders will continue stewing over the latest trading halt:

GameStop stock forecast

The clearly positive sign on the weekly chart below is that GME's share price briefly shot up above the 30-week moving average. Of course, now it needs to close above that level on the chart with the moving average currently at $31.10. The standard bull price target in the short term would be above $40. Weekly candles in March, July and August of this year all seem to show resistance once prices achieve the $40 level, although GME did spike to $49.85 in late March. A push above $50 could send the stock up to the next resistance point at $63.

GME weekly chart