The GameStop stock price will be the key meme company to watch this week as the company publishes its quarterly results on Thursday. The GME stock ended the week at $248, which was 49% below the all-time high of almost $500. It has a market cap of more than $17.58 billion.
What happened: Meme stocks were in the spotlight last week as companies like AMC and Blackberry soared. AMC shares more than doubled after the company announced a new plan to interact with retail traders who now own more than 80% of the outstanding shares. The stock then crashed after the company announced a new fundraising program.
This week, the top meme stock to watch will be GameStop. For one, the Wall Street Journal did a long feature on the company. According to the paper, some of the company’s most loyal shareholders were in it for the long term. It quoted an investor who said:
“Tesla had naysayers and Amazon had people who were against it, but it’s those two companies, and now GameStop, that are transforming a whole mindset and methodology for how to do business.”
The GameStop stock price will be watched as the company is set to publish its first earnings as a national sensation. Analysts believe that the company will report earnings of more than $1.16 billion in the first quarter and an earnings per share of $-0.71.
The company will likely do well because of the free advertisements it has received in the past few months. However, it will likely be affected by the chip shortage that have affected its console business. In its website, products like the PS 5 are sold out.
Turning to the four-hour chart, we see that the GME stock rose to $294 last week and then pulled back. This was an important level since it was the highest level on March 12 and the 38.2% Fibonacci retracement. The chart seems like it is forming a cup and handle pattern, which is usually a sign of bullish consolidation.
Therefore, with enthusiasm of the upcoming earnings rising, I can’t rule out a situation where the shares jump to the next resistance level at $348, which is about 40% above the current level. However, a drop below $200 will invalidate this trend.
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