- NYSE:GME added 2.6% on Tuesday as growth stocks battled back against Wall Street.
- The gaming industry rose after two promising earning reports from a couple of newly public companies.
- GameStop still has a lot of work to do before it can compete with other eCommerce platforms.
Update: Gamestop (GME) shares were down 1% early Wednesday but have since started to correct as the New York day progresses. The stock is catching up with most other stocks supported by Reddit investors that were flat or nearly flat in early trading activity. However, GME is still trading down some 0.37% on the day so far and has travelled between a range of $150.50 to a low of $142.23 with low volumes of $1.529m compared to an average $3.571m. The price also remains well below the 52-week range of between $3.77 and $483. From a technical standpoint, the price is on course for a lower weekly close at this rate given the resistance at the 38.2% Fibonacci retracement of the prior bearish daily impulse. A 61.8% Fibo retracement of the current bullish correction's range comes in at $127.73 ahead of $116.90 March 25 lows.
NYSE:GME is still managing to hang around at price levels that seem way too inflated for the brick and mortar gaming retailer. On Tuesday, GameStop reversed its decline and added 2.6% to close the day at $146.92, as the stock had another session of low trading volume overall. Shares continue to trade below the 50-day moving average, as the stock has lost much of its meme momentum following Redditor Roarking Kitty exercising his call options back in the middle of April.
Stay up to speed with hot stocks' news!
The gaming industry was buoyed by a couple of impressive earnings reports from Roblox (NYSE:RBLX) and Unity Software (NYSE:U). Roblox soared by 21% after reporting that it massively beat on revenue expectations although it fell flat on the losses per share. Still, Roblox had a 79% growth in daily active users year-over-year and 111% year-over-year growth in users over 13 years of age. Unity rose a modest 3.83% on 41% year-over-year revenue growth and dollar based net expansion rate of 140% compared to 133% in the first quarter of 2020.
GME stock forecast
GameStop has made it well known that it is aiming to move away from the brick and mortar retail industry and become an eCommerce driven company. While Chewy (NYSE:CHWY) CEO Ryan Cohen is trying his best to rebrand GameStop, there are still 4,816 retail locations in operation today, and much work will need to be done to shift the focus of the company to a primarily online gaming retailer.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains near 1.0900 amid weaker US Dollar
EUR/USD defends gains below 1.0900 in the European session on Monday. The US Dollar weakens, as risk sentiment improves, supporting the pair. The focus remains on the US political updates and mid-tier US data for fresh trading impetus.
USD/JPY tumbles below 157.00, awaits fresh catalysts
USD/JPY has come under intense selling pressure below 157.00 early Friday. The Japanese Yen picks up bids even as risk flows return in European trading, maintaining the US Dollar weakness-driven downside in the pair. The pair awaits fresh catalysts.
Gold defends $2,400, more upside looks likely
Gold price is attempting a bounce from $2,400, having snapped a three-day corrective decline from record highs of $2,484. Gold price capitalizes on a broad-based US Dollar softness alongside sluggish US Treasury bond yields even as markets stay risk averse.
Why these altcoins may not rise despite Ethereum ETF impact
A recent analysis by onchain analyst Thor Hartvigsen reveals that Ethereum could outperform altcoins after the launch of ETH ETFs despite wider market assumptions that these tokens provide leveraged exposure to ETH.
Week ahead: What are markets watching this week?
Dominant asset drivers to be aware of this week include Global PMIs and the Bank of Canada’s rate announcement on Wednesday, the advance estimate for US GDP growth on Thursday and the US PCE Price Index on Friday.