Key Takeaways
- GameStop shares are up again today, after a 11% surge on Friday. The stock has largely avoided a sell-off of equities that was fueled by fears about tariffs.
- In Friday’s trading, the stock saw buying interest near top trendline of falling wedge. This completed a bullish engulfing patterns. A looming death-cross on the chart, however, sends contradictory technical signals.
- Investors should watch crucial support levels on GameStop's chart near $20 and $18, while also monitoring key resistance levels near $29 and $34.
GameStop shares (GME) rose again today, after surging by 11% on Friday. The stock has largely avoided a sell-off in stocks fueled by fears about tariffs.
The stock of the videogame retailer and meme stock surged at the close of last week after news that CEO Ryan Cohen increased the stake in the company. A regulatory filing revealed that he had purchased 500,000 shares. This brings his total stake in the firm to more than 37,000,000 shares, or about 8.4%.
GameStop shares lost 23% in value by Monday’s close. The stock had risen to a 2-month high at the end of March after the retailer said it had added bitcoins to its corporate investments policy, but then pared gains.
Below, we look at GameStop’s chart and use the technical analysis to highlight crucial levels that are worth monitoring in light of potential future price swings.
Falling Wedge Retrace
GameStop shares soared sharply after breaking out above an ascending wedge pattern last week, before retracing all of the move.
In recent trading sessions, however, the stock has seen a surge in buying near the top trendline of the falling wedge pattern, completing an engulfing bullish pattern. However, a looming cross-death on the stock’s graph sends conflicting signals.
The relative strength indicator (RSI) has turned higher since Friday’s rally, but it is still below the 50 threshold. This indicates a lackluster price movement.
Let’s identify key support and resistance areas on GameStop’s chart that investors might be monitoring.
The Crucial Support Levels You Should Watch
The stock closed Monday at $24.29. It was up 3.4%.
As far as support is concerned, it’s important to keep an eye on the level of $20. This area of the chart, just below the April low, may attract buying interest near the trendline that connects a top shooting star pattern from last May to prominent troughs on the chart that formed in August and September.
If the shares are sold below this level, they could retrace back to around $18. Investors can look for entry points near the range of trading activity between November 2023 to May last year.
Monitor Key Resistance Levels
A move upwards from current levels could at first propel a rally up to the $29 mark. The shares are likely to encounter resistance near the high from last month, which also aligns with last July’s notable peak.
Buying above this level will open the door to a retest around $34. Investors who bought GameStop at a lower price may decide to lock-in profits near the January peak, and the high of an intraday reversal pattern that formed last June.
This area is also roughly located in the same area as a projected bar pattern price target, which overlays Friday’s breakout from the stock’s higher trend from October until January. The prior uptrend was a symmetrical triangular pattern, which may provide clues on how a future rise from the current falling wedge will play out.
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