- GameStop (GME) stock surged over 6% on Tuesday as risk aversion faded.
- GameStop (GME) shares rallied as risk names and meme stocks surged.
- Omicron hit all stocks, but the meme space has higher volatility.
GameStop (GME) rallied back to life on Tuesday as a risk-on mode floated all stockmarket boats higher. The main indices put in impressive rallies after a tough start to the month. The traditional Santa rally may yet be on the cards. Bitcoin suffered a serious stumble over the weekend, retreating back to nearly $40,000, but by Tuesday it has steadied and was back above $50,000, signaling that risk was definitely back on. The meme stock space took its cue from the crypto king and duly rallied sharply.
-637745600491663688.png)
GameStop (GME) chart, 15 minute
GameStop (GME) stock is still down 26% since the highs from late November. We had previously identified this as a bearish double top, which is clear from our daily char below.
GameStop (GME) stock news
The timing of the latest rally was perfect as momentum could be added to by a good set of earnings today. GameStop (GME) earnings are out after the close today. There is a conference call at 1700 EST/2200 GMT. The link for the call is here. GameStop (GME) is expected to report earnings per share (EPS) of -$0.52 for the third quarter on revenues of $1.19 billion. The last earnings report on September 8 saw some volatility, but the stock ended largely unchanged. EPS missed, but revenue came in ahead of forecasts for Q2.
GameStop (GME) stock forecast
Forecasting this one into earnings, the easiest call to make is that volatility will be elevated. This means buying options is expensive and traders should consider option purchases carefully. Volatility always spikes before earnings, meaning options are more expensive. This means theta (time decay) is higher, so options lose money daily even if nothing else changes. The double top at $250 is what did the real damage to GME. Now GME stock is trading below the significant 200-day moving average at $188. This is the big resistance to get back above. Support from the yearly Volume-Weighted Averge Price (VWAP) is at $139.58.
GME daily chart
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD climbs to 10-day highs above 1.0700
EUR/USD gained traction and rose to its highest level in over a week above 1.0700 in the American session on Tuesday. The renewed US Dollar weakness following the disappointing PMI data helps the pair stretch higher.
GBP/USD surpasses 1.2400 on further Dollar selling
Persistent bearish tone in the US Dollar lends support to the broad risk complex and bolsters the recovery in GBP/USD, which manages well to rise to fresh highs north of 1.2400 the figure post-US PMIs.
Gold trims losses on disappointing US PMIs
Gold (XAU/USD) reclaims part of the ground lost and pares initial losses on the back of further weakness in the Greenback following disheartening US PMIs prints.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
Germany’s economic come back
Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.