Following Friday’s 11% surge, GameStop shares are up again today as the stock has largely avoided the broader stock market sell-off sparked by tariff concerns.
The stock has gained buying interest near the top trendline of a descending wedge pattern, completing a bullish engulfing pattern during Friday’s trading session. However, an impending death cross on the chart is sending conflicting technical signals.
Investors should watch key support levels near $20 and $18 on GameStop’s chart, while also keeping an eye on key resistance levels near $29 and $34.
Following Friday’s 11% surge, GameStop ( GME ) shares are up again today as the stock has largely avoided the broader stock market sell-off sparked by tariff concerns.
Last week, the company’s stock price soared on news that CEO Ryan Cohen increased his stake in the company, with a regulatory filing showing that he purchased 500,000 shares, bringing his total holdings to more than 37 million shares, or about 8.4% of GameStop’s outstanding shares.
As of Monday’s close, GameStop shares have fallen about 23% since the start of the year. The stock had rallied to a two-month high in late March after the retailer announced it had added Bitcoin to its corporate investment policy before retracing gains.
Below, we’ll take a closer look at GameStop’s chart and use technical analysis to point out key levels to watch in the event of further abrupt price moves.
Falling Wedge Retracement
After breaking out above a falling wedge pattern last month, GameStop shares surged sharply before fully retracing.
More recently, however, the stock has found buying interest near the top trendline of the falling wedge pattern and completed a bullish engulfing pattern during Friday’s trading session. However, an impending death cross on the stock’s chart is sending conflicting technical signals.
Meanwhile, Friday’s unexpected rise coincided with a higher relative strength index (RSI), but the indicator remains below the 50 threshold, suggesting weak price momentum.
Let’s identify key support and resistance levels on GameStop’s chart that investors may be watching.
Key Support Levels to Watch
The stock rose 3.4% on Monday to close at $24.29.
In terms of support, the $20 level is worth watching. This area on the chart is located below the April low and could attract buying interest near the trendline connecting the top of the shooting star pattern in May of last year with the prominent troughs formed on the chart in August and September.
A break below this level could lead the stock back to around $18. Investors could look for an entry point into this area near the corresponding range of trading activity on the chart between November 2023 and May of last year.
Key Resistance Levels to Monitor
A move higher from current levels could initially drive the stock to $29. The stock could find resistance near last month’s high, which also aligns with the significant high in July of last year.
Finally, a buy above this level could look for a retest of higher resistance around $34. Investors who bought GameStop shares at lower prices may decide to lock in profits at this level, which is near the January high and the significant intraday reversal high formed on the chart last June.
This area is also roughly in the same region as the projected price target of the bar pattern that pushed the stock higher from October into January and covered the breakout point from Friday. Interestingly, the uptrend from the previous analysis follows the symmetrical triangle, which may provide clues for future moves higher from the current falling wedge.
Related topics:
