GameStop stocks are on fire right now. Since January 13, the price rose by 700% from $20 to almost $160. Then it dropped by 62% to $60.99 in less than two hours. These are some substantial price swings, which proved to be profitable for many traders.
We have just introduced GameStop to SimpleFX and you should definitely add this company to your watchlist as the trading opportunities should continue to show up this week. Trade GME.US when the NYSE opens today.
It’s very difficult to apply technical analysis to an asset with such volatility. Let’s take a look at fundamentals then.
GameStop is an old video game, consumer electronics, and gaming products, retailer. The company was founded back in the 1980s at the beginning of the computer gaming industry. The most successful years for the company were not so long ago, as it noted the biggest expansion in 2004–2016. Since then it has not been good, however.
GameStop will probably end 2021 and 2022 with a net loss. The sales are not growing as the market has been taken over by direct download from consoles – Sony or Xbox. Brick and mortar retailers have been also hit by the pandemic, which resulted in extremely poor sales before Christmas.
The stock price had been pretty stagnant for many months but started to grow since September 2020. Many investors saw an opportunity in what they considered an overpriced asset and opened short positions on GameStop. However, another group of investors created a group on Reddit, where they decided to back the stock. The situation created a so-called “market squeeze”.
At the moment the stock is subject to incredible speculation on Wall Street. As investors are hunting for short sell opportunities, the market can go against them. GME.US can plunge at any moment as there’s no much fundamental value stored in the struggling company.
It’s a great opportunity for margin traders. Make your choices accordingly, and enjoy the volatility. The market opens at 2:30 p.m. UTC.
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