GameStop (GME) has attracted a horde of followers who continue to hope for another intense $450 rally to reward them. Hope is not an investment strategy, but let's check out the charts and indicators to see if GME can make another upside run.
In the daily bar chart of GME, below, we can see that the shares are still in a downward trend but there are twin lows in March and May. Prices have rallied above the rising 50-day moving average line and sit just below the declining 200-day moving average line.
The On-Balance-Volume (OBV) line has risen the past four months even as prices weakened. This is a bullish divergence and points the way for GME to rally. The Moving Average Convergence Divergence (MACD) oscillator is ready to cross above the zero line for an outright buy signal.
In the weekly Japanese candlestick chart of GME, below, we can see some interesting clues. Prices are testing the underside of the declining 40-week moving average line.
The weekly OBV line has been steady and the MACD oscillator is below the zero line but slowly improving.
In this daily Point and Figure chart of GME, below, we can see a potential price target of $269.
Bottom-line strategy: If you are long GME this could be your (last?) chance to sell your positions at favorable levels. Traders who are long should use available strength in the next few weeks to sell. The Point and Figure chart suggests a rally to $269 is possible.
