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GameStop Stock Price: Should You Buy GME Shares Now?

The Gamestop stock price has been in a strong bearish trend in the past few months as concerns about the company remain. GME shares dropped to a low of $25.4, which was the lowest level since May 23rd. It has fallen by more than 80% from its highest level in 2021 as demand for the stock wanes. So, is GameStop a good stock to buy?

Why is GME falling?

GameStop share price has crashed by more than 20% this year. This means that it is in line with the performance of the S&P 500 and Dow Jones which have fallen by double-digits this year alone. Other global indices like the German DAX and UK FTSE 100 have all plummeted as well.

GameStop stock has fallen because of the end of the meme stock era. After doing well in 2021, most meme stocks have all pulled back as interest rates rise. For example, companies like AMC, Bed Bath & Beyond, and Blackberry have all crashed this year.

At the same time, demand for video games has been relatively muted as people go back to work and school. This is evidenced by the performance of gaming and semiconductor stocks like AMD and Nvidia. The firm’s revenue for Q2 dropped to $1.13 billion, which was lower than the previous $1.18 billion. This happened as the company’s collectibles sales soared to more than $223 million. In total, the company lost $108 million.

GameStop stock price has also dropped as investors wait for more details about its partnership with FTX. The firm will carry FTX’s gift cards in its stores and is now the company’s preferred retail partner in the US. Still, it is unclear whether this deal will amount to anything meaningful in the near term.

GameStop stock price forecast

The daily chart shows that the GME stock price has been in a tight range in the past few days. In this period, the shares have formed what looks like a symmetrical triangle pattern that is shown in green. It has also moved slightly below the 25-day moving average.

Therefore, the short-term outlook for GameStop’s share price is neutral with a bearish bias since the triangle pattern is yet to get to its confluence level. A drop below the lower side of the triangle pattern will be a victory for bears and will see it crash below $19.4. A move above the resistance at $30 will invalidate the bearish view.

GameStop share price