GameStop (GME) Buy Signal Appears on Stock Chart’s Quarterly Breakout

GameStop shares are moving again, and the momentum just might start if you believe in the breakout of this quarterly chart.

GameStop shares have picked up steam over the past month, rising more than 30% in November. It looks like the momentum is just beginning in the stock as an actionable buy signal has appeared on the quarterly chart. Please take a look.

GameStop shares broke out of an inside quarterly pattern higher above $231.44/share.
GameStop shares broke out of an inside quarterly pattern higher above $231.44/share.

It’s been a wild year for GameStop’s stock price swings. The first quarter of 2021 saw shares rise from a low of $17.08/share to $483/share. Q2 2021 traded within this range, setting a high during the quarter of $344.66/share and a low of $132.00/share. Q3 2021 also traded inside the previous quarter’s range, trading up to $231.44/share and with a low price of $145.22/share. Earlier this month, shares of GME climbed above that watermark high in Q3 2021, but the stock reversed to close in the prior quarter’s range. Today, stocks have convincingly breached that $231.44/share level, creating an actionable buy signal on the quarterly chart.

This breakout is significant as shares of GameStop (GME) have been flat for most of the year. The stock is also showing “time continuity” with shares rising over the year, quarter, month, week and day. The coupling of the quarterly breakout with all-timeframe momentum is enough to bring some traders back into the stock. 80-90% of stock market transactions are governed by rules-based algorithms, which makes technical analysis a very important factor when it comes to deciphering daily stock price movements.

While GameStop is still set to report results next month, this quarterly buy signal comes at a very interesting time. Less daring investors can use the Q3 2021 high of $231.44/share as a stop loss level, if they don’t have diamond hands. Long-term investors in GME can just sit back and enjoy the fireworks as stocks continue to react to today’s breakout.

This article is for educational purposes only and should not be considered investment advice. Please consider your own investment time horizon, risk tolerance and consult a financial adviser before acting on this information.

Interested in learning this style of technical analysis? Give the creator of #TheStrat a follow on Twitter @RobInTheBlack.

Full disclosure:

At the time of this article, Shacknews major shareholder Asif A. Khan, his family members and his company Virtue LLC held the following positions:

Long GameStop via GME shares

Long GameStop via GME call options

Stonk Market Expert

Karen J. Nelson