GameStop stock price struggled in yesterday’s trading session, closing the markets with a 6.39 per cent drop. The drop was also a continuation of Wednesday’s strong and aggressive push to the downside, which dropped by 3.96 per cent.
The company’s price drop comes amidst reports that Diamond Comic Distributors had filed a $2.8 million lawsuit against the company. This is after Gamestop refused to upload contractual obligations. The core of the lawsuit is meant to determine when GameStop is and is not allowed to cancel orders. According to the lawsuit, GameStop cancelled certain accepted purchase orders that were yet to be fulfilled back in April. The orders were valued at a total contract price of $950,000.
Despite the attempted cancellation, Diamond argues that their lack of involvement in the process meant GameStop had no consent from them, making the cancellations illegal. The company also goes further to explain that they had already partially paid for the cancelled products and that GameStop had already made up its mind that they would not accept nor pay for the orders it had attempted to cancel.
Besides the lawsuit filed by Diamond Comic Distributors, there was no other major news specific to the company that would have resulted in such a 6.39 per cent price drop in yesterday’s trading session. Looking at the chart below, The strong and aggressive bearish trend during yesterday’s trading session was an extension of Wednesday’s drop.
The recent price drop has also seen GameStop’s stock price falling below the $40 price level. In addition, William’s Alligator also shows the prices falling below the teeth of the Williams Alligator. Usually, when prices fall below the red line, it is highly likely that we may be seeing a continuous move to the downside.
Therefore, putting everything together, my GameStop Stock prediction expects the prices to continue dropping. We are highly likely to see the prices trade below the $35 price level in the next few trading sessions. My analysis will, however, be invalidated should the prices return above the $40 price level.
This post was last modified on Aug 19, 2022, 10:57 BST 10:57