GameStop shares have gotten their groove back in the past month, rising over 30% in November. It appears that momentum may just be getting started in the stock as a actionable buy signal has appeared on the quarterly time period chart. Please take a look.
It's been a wild year for GameStop's share price fluctuations. Q1 2021 saw shares run from a low of $17.08/share all the way to $483/share. Q2 2021 traded inside of that range, setting a high during the quarter of $344.66/share and a low of $132.00/share. Q3 2021 also traded inside of the previous quarter's range, trading as high as $231.44/share and with a low price of $145.22/share. Earlier this month, shares of GME did spike above that Q3 2021 high watermark, but the stock reversed to close back within the previous quarter's range. Today, shares convincingly pierced that $231.44/share level, creating an actionable buy signal on the quarterly chart.
This breakout is meaningful as GameStop (GME) shares have been treading water for most of the year. The stock is also exhibiting "time frame continuity" with shares up on the year, quarter, month, week, and day. Coupling the quarterly breakout with the momentum across all time frames is enough to get some traders back into the stock. 80-90% of trading on the stock market is governed by rules-based algorithmic trading, making technical analysis a very important factor when it comes to deciphering day-to-day share price movements.
With GameStop still set to report their earnings results next month, this quarterly buy signal comes at a very interesting time. Less bold investors can use the Q3 2021 high of $231.44/share as a stop loss level, if they lack diamond hands. Long-term investors in GME can just sit back and enjoy the fireworks as shares continue to react to today's breakout.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
Interested in learning this style of technical analysis? Give the creator of #TheStrat a follow on Twitter @RobInTheBlack.
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, and his company Virtue LLC had the following positions:
Long GameStop via GME shares
Long GameStop via GME call options