Are meme stocks GME and AMC making a comeback?
The 2 stock price moves have been relatively small, as they haven’t even retraced to the 38.2% Fibonacci level from their all-time highs.
Share this:
Gamestop (GME) chairman Ryan Cohen bought an additional 100,000 shares of the company recently to bring his total holdings to about 12%. As a result, the share price of GME has jumped nearly 50% so far this week, from an opening print of 90.00 to this week’s high, thus far, of 150.93! As has been the case, meme stock AMC followed GME higher. Recently, to the surprise of many, AMC Entertainment bought 22% of Hycroft Mining, a gold mine company. (And if you are a fan, AMC announced a deal with WWE that Wrestlemania will be live in AMC theaters on April 2nd and 3rd!). AMC is currently up nearly 30% for the week.
What is GameStop and why did it trigger a short squeeze in 2021?
On a daily timeframe, GME has been moving lower since making all-time highs in January 2021 after traders at Wallstreetbets on Reddit squeezed the stock to 483.00. Price retraced nearly 100% of the move higher, making a low of 38.50 by the week of February 19th, 2021! Since then, the stock bounced to 344.46 and has been trading in a descending triangle, making lower highs along the way. Last week, price reached its lowest level in a year at 77.58 before bouncing aggressively this week.
Source: Tradingview, Stone X
Trade GME now: Login or open a new account!
On a 240-minute chart price has retraced to the 38.2% Fibonacci level from the highs of November 23rd, 2021 to the low of March 14th, near 144.95. Horizontal resistance and the 50% retracement from the same timeframe are the next resistance level between 165.42 and 166.70. The 61.8% Fibonacci retracement level and the downward trendline of the long-term triangle sits above there near 185.55. If GME moves lower, support at the gap from March 22nd is at 125.60. Below there, price can fall back to near-term horizontal support at 99.22, then the March 14th low at 77.58.
Source: Tradingview, Stone X
The daily chart of AMC looks very similar to that of GME as price made a move from 13.61 to 72.62 in a matter of weeks. However, the run-up in price didn’t occur until May. In addition, after the move higher, AMC didn’t retrace the entire move as did GME. AMC immediately began making lower lows and lower highs and reached its lowest point since the run-up on March 14th at 12.90. However, with the move higher in GME, AMC moved right along with it. Notice the correlation coefficient at the bottom of the chart is +0.96. A correlation coefficient of +1.00 is a perfect correlation, meaning that the 2 stock prices move in the same direction 100% of the time. +0.96 is pretty close.
Source: Tradingview, Stone X
Trade AMC now: Login or open a new account!
On a 240-minute chart, the correlation coefficient is just as strong as on the daily timeframe. First resistance is at the 38.2% Fibonacci retracement from the highs of November 8th, 2021 to the low of March 14th at 25.53. Just above there is confluence of horizontal resistance and the downward sloping trendline of the long-term triangle near 26.83, then the 50% retracement from the recently mentioned timeframe at 29.43. Horizontal support sits below at 16.36, then the March 14th lows at 12.90.
Source: Tradingview, Stone X
Meme stocks GME and AMC have been on the move once again. In the grand scheme of things, the 2 stock price moves have been relatively small, as they haven’t even retraced to the 38.2% Fibonacci level from their all-time highs. However, the move was enough for them to get noticed!
Learn more about equity trading opportunities.
Gamestop (GME) chairman Ryan Cohen bought an additional 100,000 shares of the company recently to bring his total holdings to about 12%. As a result, the share price of GME has jumped nearly 50% so far this week, from an opening print of 90.00 to this week’s high, thus far, of 150.93! As has been the case, meme stock AMC followed GME higher. Recently, to the surprise of many, AMC Entertainment bought 22% of Hycroft Mining, a gold mine company. (And if you are a fan, AMC announced a deal with WWE that Wrestlemania will be live in AMC theaters on April 2nd and 3rd!). AMC is currently up nearly 30% for the week.
What is GameStop and why did it trigger a short squeeze in 2021?
On a daily timeframe, GME has been moving lower since making all-time highs in January 2021 after traders at Wallstreetbets on Reddit squeezed the stock to 483.00. Price retraced nearly 100% of the move higher, making a low of 38.50 by the week of February 19th, 2021! Since then, the stock bounced to 344.46 and has been trading in a descending triangle, making lower highs along the way. Last week, price reached its lowest level in a year at 77.58 before bouncing aggressively this week.
Source: Tradingview, Stone X
Trade GME now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
On a 240-minute chart price has retraced to the 38.2% Fibonacci level from the highs of November 23rd, 2021 to the low of March 14th, near 144.95. Horizontal resistance and the 50% retracement from the same timeframe are the next resistance level between 165.42 and 166.70. The 61.8% Fibonacci retracement level and the downward trendline of the long-term triangle sits above there near 185.55. If GME moves lower, support at the gap from March 22nd is at 125.60. Below there, price can fall back to near-term horizontal support at 99.22, then the March 14th low at 77.58.
Source: Tradingview, Stone X
The daily chart of AMC looks very similar to that of GME as price made a move from 13.61 to 72.62 in a matter of weeks. However, the run-up in price didn’t occur until May. In addition, after the move higher, AMC didn’t retrace the entire move as did GME. AMC immediately began making lower lows and lower highs and reached its lowest point since the run-up on March 14th at 12.90. However, with the move higher in GME, AMC moved right along with it. Notice the correlation coefficient at the bottom of the chart is +0.96. A correlation coefficient of +1.00 is a perfect correlation, meaning that the 2 stock prices move in the same direction 100% of the time. +0.96 is pretty close.
Source: Tradingview, Stone X
Trade AMC now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
On a 240-minute chart, the correlation coefficient is just as strong as on the daily timeframe. First resistance is at the 38.2% Fibonacci retracement from the highs of November 8th, 2021 to the low of March 14th at 25.53. Just above there is confluence of horizontal resistance and the downward sloping trendline of the long-term triangle near 26.83, then the 50% retracement from the recently mentioned timeframe at 29.43. Horizontal support sits below at 16.36, then the March 14th lows at 12.90.
Source: Tradingview, Stone X
Meme stocks GME and AMC have been on the move once again. In the grand scheme of things, the 2 stock price moves have been relatively small, as they haven’t even retraced to the 38.2% Fibonacci level from their all-time highs. However, the move was enough for them to get noticed!
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Oil Quietly Hands the Fed a Reason to Stay Hawkish
Oil prices and the U.S. dollar are both on the front foot as elevated energy costs feed Fed warnings that inflation may prove sticky.
S&P 500 forecast: Stocks extend drop as correction risks grow
US and global equity markets have extended Wednesday’s sell-off, with Wall Street opening lower after a weak handover from Asia and Europe. The deterioration in risk appetite has been spreading across global markets. The dollar was firmer, Treasury yields were holding onto yesterday’s gains, while gold, silver and bitcoin were all under pressure alongside equities and major currencies.
Gold forecast: XAU/USD could take a larger dive after the big rise in yields
Gold prices have been falling in the last few days after last week’s post-FOMC pop faded amid rising interest rate expectations, higher oil prices and a strengthening US dollar. As before, I wasn’t convinced gold would thrive in the current macro backdrop.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.