Gamestop (NYSE: GME) stock price has become hot once again due to its recently released quarterly earnings report. The stock price of the world’s largest gaming and trade-in store gained 52% on Wednesday before shedding some gains in the later part of the day.
On Thursday, the pullback continued as the price opened lower. Till press time, Gamestop shares were trading at $23.96 after showing minor gains in the first 2 hours of today’s trading session. The price is currently hovering in a key resistance zone.
The reason behind the massive surge in Gamestop stock price is the announcement of the first-ever profitable quarter in the last two years. From a net loss of $147.5 million during the quarter ending in December 2021, Gamestop swung the tide in its favor by reporting 48.2 million net profit during the same quarter in 2022.
Gamestop share price immediately soared to its YTD highs after the release of the earnings report. This led to many retail investors expecting another massive short squeeze, like in 2021. However, the price got rejected from the 200-day moving average, and it is now trading 9.4% below its yesterday’s high.
The NYSE: GME chart shows that the price has finally broken out of the downward trendline. The breakout is still not confirmed, as te price needs to close the week above this trendline. This line has acted as a diagonal resistance for the price in the last two years.
It is also evident from the chart that the price has faced rejection from the 200-day moving average, which lies at $26.45. This key moving average is usually tough to reclaim in the first attempt. Nevertheless, it won’t be appropriate to consider a 2021-like short squeeze in Gamestop price as the market dynamics are totally different now. Another reason for not chasing the ongoing pump is the 1.4% decrease in the company’s sales during last year.
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This post was last modified on Mar 23, 2023, 15:46 GMT 15:46