- NYSE:GME fell by 6.55% on Wednesday amidst a broader market sell off.
- GameStop and AMC fall short of the latest short squeeze attempt by retail investors.
- The recent crypto market crash has forced retail investors to show their paper hands.
Update May 20: GameStop Corp (NYSE: GME) has kicked off Thursday's trading session with a moderate recovery, yet of psychological importance – a recapture of the round $170 level. As the chart shows, shares of the videogaming firm are holding above the $164.50 support line. To further increase momentum, the price would need to surpass the highest close this week, which stands at $180.67. The reasons for the latest moves are detailed below.
NYSE:GME investors may not quite have the diamond hands they all claim to be using as the meme stock saw its recent rally come to an end. On Wednesday, shares tumbled by 6.55% to close the trading session at $168.83. Shares fell after climbing steadily for the past couple of weeks, and GameStop will need to find support soon or risk falling back below its 50-day moving average price of $165.64.
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The impending short squeeze that has been brewing across social media for GameStop and AMC (NYSE:AMC) fizzled out on Wednesday after several days of escalating momentum. The latest attempt has been centered around AMC, but GameStop and other meme stocks have been surging as sympathy plays. Will there be another coordinated short squeeze on Wall Street? A report was released that revealed hedge funds with short positions in AMC and GameStop had already lost over $1 billion, and with the trading volume that AMC has been experiencing, these funds could be in for some more pain in the coming days.
GME stock forecast
There is another theory as to why the short squeeze was stalled on Wednesday, and it has to do with the current cryptocurrency market crash. The prices of popular coins like Bitcoin, Ethereum, and Dogecoin have all plummeted over the past few days, and a large percentage of retail investors have been forced to liquidate their positions that have mostly been made on margin. It seems that at the end of the day, even the hardest of diamond hands turn to paper hands when the margin calls arrive.
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