GameStop Stock Surges as Potential Bitcoin Investments Are Considered
GameStop shares rose nearly 8% following reports of possible bitcoin investments. Key price levels to watch include $29, $32, and $42 for resistance, with $25 as notable support. The stock is poised for a breakout from a falling wedge pattern, indicating potential upward movement.
GameStop shares surged nearly 8% in after-hours trading following news that the game retailer is contemplating investments in bitcoin and cryptocurrencies. This potential shift indicates a breakout above a falling wedge pattern could occur in the upcoming trading session, providing optimism for shareholders. Investors should monitor key resistance levels at $29, $32, and $42, while the support level around $25 remains critical during market fluctuations.
The report originated from CNBC, stating that GameStop is evaluating alternative asset classes, including bitcoin. The speculation gained traction after GameStop CEO Ryan Cohen was seen with Michael Saylor, co-founder of MicroStrategy, noted as a prominent corporate advocate for bitcoin. Despite Saylor not being actively involved in GameStop’s discussions about crypto, perceptions of change continue to influence stock performance.
Despite GameStop shares dropping 16% since the year’s start, they have experienced a remarkable 85% gain over the past year, largely attributed to retail investor enthusiasm, notably from influencers such as Keith Gill, known as “Roaring Kitty.” The current technical analysis indicates that if the stock surpasses specific price levels, considerable upward momentum could be expected.
In analyzing the falling wedge pattern from the last seven months, the breakout suggests a significant price rally may be imminent. Observations indicate that although the Relative Strength Index (RSI) currently trends below 50, it has shown improvement since recent oversold conditions, suggesting recovering momentum could facilitate a price rally.
Key price thresholds include $29 as a notable resistance where selling pressure is anticipated. Should shares advance past this level, they could reach approximately $32, where investors who bought in at lower prices may seek to liquidate their positions near previous peaks related to January highs. Furthermore, utilizing a bars pattern tool implies an upside target of around $42 could be possible; this level appears substantial for potential profit-taking.
In summary, GameStop’s consideration of bitcoin investments has revitalized investor interest, contributing to a notable stock price increase. Key resistance levels at $29, $32, and $42 warrant investor attention, while the $25 mark serves as critical support. The anticipated breakout from the falling wedge pattern could signal further upside momentum in the stock, as the market anticipates potential cryptocurrency ventures.
Original Source: www.investopedia.com
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