GME - Very Bullish!

27 мая 2021 г.

GME has broken out of the symmetrical triangle pattern formed over the past 3 months. The exact time of when the break occurred is up to interpretation. If you look at the first massive rally GME had towards the end of January, you'll notice that it suddenly stops and tops out at ~$485 for no technical reason. I believe the rally was cut short due to the trading restrictions that were place on many stocks due to liquidity concerns. This event has served as a prominent resistance, aggressively rejecting any test on its trend line. You will also see that when the stock market tumbled in March 2020 due to the COVID-19 pandemic a significant resistance trend was created, which later flipped to support to form the bottom of the symmetrical triangle. The moving averages continued to serve as a very trusty and reliable source of support any time we fell out of the pattern, which I believe is possible in any volatile market and does not invalidate the pattern.

Now, there's a lot to be said about what occurred prior to the pandemic which I won't get into depth here, but I will say that traditional brick & mortar focused stocks were accumulating massive short interest pressuring the share price down. I should also mention that during 2019 bond yields caused some sell off in the overall market.

Short interest on GME is currently around 20%. It is possible that many have covered over the past few days. Although this amount pales in comparison to the short interest logged back in January, which was a staggering 141%, it is still significant.

I believe we are currently on a very similar trajectory as we were in the last weeks of January 2021. If we take the range of the largest part of the symmetrical triangle, it's possible that we hit a share price of $3700. This price may sound absurd but that is what I’m inferring from the technicals on the chart alone. It's important to note that there are many other variables which would affect the price action significantly, such as the change in short interest. However, there are many other fundamental variables at play here as well which can cause the price to increase even more rapidly than before.