GameStop Stock Price: GME Could Retest ATH According to This Pattern

The GameStop stock price has been relatively volatile in the past few trading sessions as retail traders continue betting on the company’s future. This week, the GME share price soared to a multi-week high of $346 and then clashed by almost 40% to $225 yesterday.

What happened: GameStop, once a declining videogame retailer has been one of the most-talked companies this year. Its share price soared from less than $15 to more than $480. The shares then collapsed to below $40 in February and has been bouncing back since then.

It has jumped by more than 643% in the past few weeks, bringing GameStop total market cap to more than $18 billion. This is a rich valuation considering that GameStop’s business has been in a decline as more game players shift to online games.


Indeed, its annual revenue has declined from more than $9.6 billion in 2016 to more than $5 billion in the past 12 months. It has also moved from making huge profits to making losses. While many long-term investors have called-out the valuation of the firm, there is a possibility that the ongoing frenzy will continue as interest rates remain reasonably low. An investor told CNBC:

“I really am concerned that there’s too much promotion, there’s too much speculation, there’s too much trading stocks as lottery tickets for companies that are far from proven. That’s never the way we try to make money. Just stay out of the way. We don’t trade very much. We buy and hold for the long term.”

GameStop Stock Price Prediction

So, what next for the GME stock price? On the four-hour chart, we see that the GameStop stock declined to $38.20 in February. This price was slightly below the 78.6% Fibonacci retracement level. Also, the shares have continued to climb and are being supported by the 25-day and 15-day moving averages. Notably, the stock seems to be forming a cup and handle pattern. 

Therefore, in my view, while the stock will keep being volatile, there is a possibility that it will retest its YTD high of $482. If this happens, the stock will either consolidate or pullback and then continue rising.

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