GameStop stock price broke lower yesterday from what appears to be a triangle as a reversal pattern. The move lower comes in the context of declining equity markets in the United States, and the share price is seen down to $179.50 in pre-market.
This is one of the most popular stocks among retail traders, that it is up over 4,300% in one year. Even year to date it is up over 900%, in an epic short squeeze that made headlines.
Renewed fears over the COVID-19 pandemic may hurt retail stocks in the upcoming month. The Delta variant of the virus spreads faster and is more infectious, threatening to dampen the economic recovery. If the US equity markets start fearing a slowdown in growth, we should not be surprised to see the meme stocks suffering.
Interestingly enough is how analysts are viewing the GameStop stock price. Out of eleven analysts that cover the stock, seven of them issued sell ratings, two issued neutral ratings, and only two issued buy ratings. The sentiment, therefore, is negative, explaining much of the bearish price action seen lately.
The ranges for the stock price are quite something too. For instance, Wedbush Morgan Securities sees $50 next, while Ascendiant Capital Markets downgraded the stock to sell in April with a target of $10.
GameStop Technical Analysis
The technical picture shows strong resistance at the $320 area, a key level to the upside. The break of the dynamic support puts pressure on the price action and now the $160 level is the next one to watch.
Bears may want to wait for a bounce to the rising trendline where the price action should meet dynamic resistance before going short. The $280 level should act as invalidation for the short trade while the target may be set by using a risk-reward ratio of 1:2.
Bears should keep in mind that GameStop is the favorite stock for the retail community, so the risk of a short-squeeze remains present.
GameStop Price Forecast
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