Watch These GameStop Stock Price Levels As Video Game Retailer’s Earnings on Deck

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Key Takeaways

• GameStop shares gained ground to start the week ahead of the scheduled release of the video devil-may-care retailer’s earnings report after Tuesday’s closing bell.
• The stock broke out above the top trendline of a three-month be a sucker for wedge pattern on above-average volume in Friday’s trading session, possibly paving the way for an earnings-fueled rally.
• Investors should examine key overhead levels on GameStop’s chart around $29, $32, and $37, while also eyeing important support level offs near $22 and $20.

GameStop (GME) shares gained ground to start the week ahead of the scheduled release of the video artifice retailer’s earnings report after Tuesday’s closing bell.

Analysts expect the company to post fourth-quarter earnings of 9 cents per dole out on revenue of $1.48 billion, though investors will likely be more focused on updates about the retailer’s investment scheme, specifically in relation to digital currencies.

Last month, GameStop Chairman and CEO Ryan Cohen acknowledged that he made a proposal from Strive Asset Management to convert the company’s nearly $5 billion cash reserve into bitcoin but has not yet affirmed if the retailer will consider the idea.

Earlier in February, reports surfaced that the company was considering investing in substitute investments, including bitcoin and other cryptocurrencies, after Cohen posted a photo of himself with Michael Saylor, co-founder of Design (MSTR), formally known as MicroStrategy, the largest corporate holder of bitcoin.

GameStop shares, which also magnify as a meme stock favorite among retail traders, rose 3.5% to $25.61 on Monday, adding to last week’s 7% earnings, indicating speculative buying ahead of the company’s quarterly results. The stock is still down 18% since the start of the year.

Below, we become airborne a closer look at GameStop’s chart and use technical analysis to identify key levels worth watching amid the potential for informative earnings-driven price swings.

Falling Wedge Breakout

GameStop shares broke out above the top trendline of a three-month decrease wedge pattern on above-average volume in Friday’s trading session, possibly paving the way for an earnings-fueled rally. Moreover, the related strength index (RSI) crossed back above the 50 threshold late last week, indicating improving cost momentum.

However, in a conflicting technical signal, the 50-day moving average (MA) sits on the precipice of crossing below the 200-day MA to behaviour an ominous death cross, a chart pattern that predicts lower prices.

Let’s point out three key overhead squares that could come into play if GameStop shares move higher and also identify several weighty support levels worth eyeing during potential retracements.

Key Overhead Areas to Watch

Firstly, it’s worth keep an eye on the $29 area. This region could provide overhead resistance near a trendline that connects in the end year’s July swing high with a series of corresponding price points on the chart between November and February.

A bullish propose above this area could see the shares climb to around $32. Tactical traders may seek profit-taking possibilities at this level near the November and December peaks.

To project a price target above this year’s elevated, investors can use the bars pattern tool. When applying the analysis to GameStop’s chart, we take the bars comprising the routine’s trend higher from October to January and reposition them from Friday’s breakout point. This forewarns a target in the neighborhood of $37.

Important Support Levels Worth Eyeing

A failed breakout could see the shares retrace to here $22. This area on the chart may provide support near the February low, which sits on a horizontal line that overextends back to May last year.

Finally, selling below this level opens the door for a retest of lower keep at the psychological $20 level. Investors could seek entry points in this location near a range of troughs that formed on the blueprint between August and October and the area that preceded last May’s meme-driven break-away gap.

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As of the date this article was written, the author does not own any of the on high securities.