GameStop stock falls over 4% on Friday as indices tumble.
The meme stock now looks increasingly bearish on the charts.
GME shares fell after earnings release last week.

GameStop (GME) is losing its crown as the meme-stock king with a fall of over 4% on Friday. AMC on the other hand just keeps on rallying, closing up above $50 for the first time since July (see more).

GME stock has been struggling for form since releasing results last week, after the close on September 8. The results were mixed with the Earnings Per Share (EPS) number missing estimates but revenue coming in ahead of estimates and showing steady progress. However, investors in GameStop were frustrated by any lack of clarity on the post-earnings conference call as to potential turnaround plans for the business. Ryan Cohen has been tasked with doing for Gamestop what he did for Chewy (CHWY), but Cohen had hinted in the summer that he would not be detailing plans as he did not want to let competitors know the plans for GME. Not providing earnings guidance going forward will also likely have hit investor sentiment in GME.

AMC has teased some form of partnership with GME but no more details have been forthcoming. AMC CEO said last week that they had made contact with GameStop. Social media volume was high after the GME results, but the volume of mentions on social media appears to have dropped off if the latest Refinitiv data is to be looked at.

GME key statistics

Market Cap
$14.3 billion
Price/Earnings
-181
Price/Sales
2.7
Price/Book
31.3
Enterprise Value
$11 billion
Gross Margin
0.24
Net Margin

-0.02

52 week high
$483
52 week low
$4.56
Average Wall Street Rating and Price Target
Sell $88.33

GameStop had formed a bullish continuation flag after meme stock day on August 24. This was a day when many meme stocks rallied strongly with GME up 27% and AMC up over 20% that day. However, the continuation phase had been taking too long, which was understandable with investors waiting for results. Now that results are out of the way the bullish impetus created by the August 24 move and the continuation flag pattern has ended.

Gamestop now finds itself in heavy volume traffic as we can see from the point of control at $178.97. This is the large consolidation phase we have highlighted. Each price spike finds support in this range from $180-140. Our buy-the-dip zone is at $150, this is high volume and the 200-day moving average will be at this level shortly.

Neutral at current levels, bearish below $146, bullish above $230.

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