GameStop (GME) shares nearly 15% today – stock chart price levels to watch

The rise in GameStop shares continues to confuse many people, and GME shares made matters worse for the shorts today. The stock rose nearly 15% in intraday trading, on what appears to be no news. Fortunately, there are signals in the stock chart that can explain today’s move using technical analysis.

It’s useful to watch stocks over multiple timeframes, and it looks like GameStop had a buy signal today on the daily and weekly charts. Please take a look:

GameStop (GME) Daily Chart

GME shares traded above last Friday’s high of $166.47/share, creating a buy signal on the daily chart this morning.

GameStop shares traded inside yesterday’s range on Friday last week, setting stock for a potential buy or sell signal should the attempted price balance break. Shares broke higher this morning when the price broke above Friday’s high of $166.47/share. This buy signal was only valid for today, but it was definitely the first sign of renewed momentum for GME trading that we saw this morning.

GameStop Weekly Chart (GME)

GameStop shares traded above last week's high of $169.95 this morning, creating a reversal strategy buy signal on the weekly chart.
GameStop shares traded above last week’s high of $169.95 this morning, creating a reversal strategy buy signal on the weekly chart.

The chart pattern on the GME weekly chart is different from the daily buy signal mentioned above. Last week, shares of GameStop (GME) traded below the previous week’s low to close in that range. It is a three bar pattern called rev strat by some traders. After trading inside the previous week’s range, GME shares tumbled last week and then rallied with the rest of the stock market. A break above last week’s high at $169.95/share created an active weekly buy signal. This signal is still active through the end of the week, so there may be even more fireworks ahead for GameStop shareholders as long as shares stay above $169.95. .

GameStop (GME) monthly chart

GameStop's monthly chart can provide some indication of where things may go from here.
GameStop’s monthly chart can provide some indication of where things may go from here.

So far, this article has illustrated how a daily buy signal leads to a weekly buy signal. Temporal continuity is a strange concept, but it is very important to pay attention to it. Who doesn’t want to own a stock that is up over all time periods or, on the contrary, be short on a stock that is down over all time periods? In GameStop’s case, the monthly chart is in the middle of its fourth consecutive month. Obviously stocks are trying to find some sort of price equilibrium, but it is important to pay attention to the levels at which a breakout or breakdown could occur. With two weeks left in the month, there is plenty of time for the GME monthly chart to make a similar move to its shorter counterparts. A break above the April 2021 high of $196.97/share would trigger an inside month and a bullish buy signal, while a break below the April 2021 low of $132 /action would lead to a monthly sell signal.

We don’t know if the balance will break this month, but with two shorter-term buy signals appearing today, it’s worth paying attention to the monthly chart to get an idea of ​​where the trades might go. things. A break above $196.97/share could send GME back into the $200s in no time, as shares are still heavily shorted. Only time will tell.

Nearly 90% of all trading on the stock exchange is done by computers that pay a lot of attention to technical analysis. There is no intuition or sentiment driving these trades, so it would be wise to pay attention to the price points above if you are brave enough to trade or invest in GameStop at these high valuations. The market currently values ​​GME at almost $13 billion, which might sound crazy, but it seems quite rational compared to Dogecoin’s $64 billion market cap. But obviously one of those assets is a cryptocurrency and the other is just a stock that acts like one.

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.

Stonk Market Expert

Karen J. Nelson