GameStop stock price could hit $60 if $93 support fails
GameStop stock price is trading lower pre-market, as are most WallStreetBets meme stocks this Thursday. GameStop stock price appears set for another weaker opening after falling 8.9% on Wednesday. Even the news that Melvin Capital, the hedge fund that took a big hit from retail investors at WallStreetBets in 2021, was being liquidated couldn’t spark a festive upturn in price activity.
The fall in GameStop’s stock price is directly related to the inflation-induced drop in big retail revenue. Walmart and Target reported worse-than-expected financial results, sending markets lower. These companies are a barometer for the retail sector and weak earnings performance weighed heavily on US markets.
Technically speaking, the decline seen in Gamestop’s stock price started from the double top of March 28 and April 1, with the expanding triangle extending the downward correction that resulted in the pennant pattern changing. .
GameStop Stock Price Outlook
The moving pattern on the daily chart is that of a bearish pennant. Wednesday’s decline challenges support at 93.01 (low from March 11, 2022), thanks to the violation of downside support. This support remains vulnerable even if the bulls push for a move back. A break of this pivot allows the bears to access support at 77.86 (March 14th and May 12th lows). Further decline drives the stock price lower, targeting the February 8, 2021 low at 60.18. The hit of 60.18 completes the bearish flag pattern on the daily chart. Further support is seen at 40.32, where a previous low from February 18, 2021 is found.
On the other hand, a bounce off the 93.01 support line allows for a rally, taking price activity towards 119.69 (26th Jan high) if momentum is strong enough. Above this level, 128.82 (February 11 high) and 145.35 (August 4, 2021 and April 22, 2022 high) form additional targets to the north. Any upward movement in the direction described invalidates the expectation of the flag.