Skip to content

GameStop stock rallies toward $20: Short squeeze incoming?

GameStop stock rallies toward $20: Short squeeze incoming?
Elmaz Sabovic

GameStop Corporation (NYSE: GME) saw a notable surge in the latest session, jumping 13%. The gains continued in pre-market trading on May 10, fueled by growing interest from bullish investors and short sellers.

Despite the absence of any major company news, the technical analysis reveals that GameStop has formed several compelling chart patterns. This development has sparked a surge in interest in the stock, with some even speculating the likelihood of another short squeeze.

GME stock 30-day price chart. Source: Finbold
GME stock 30-day price chart. Source: Finbold

Technical analysis of GME stock

GameStop stock has been on an upward trend, hitting a recent high of $17.45 on May 3 and a higher low of $10.70 on May 1. This surge, around 48% between May 2 and May 3, brought the stock back above its 200-day simple moving average (SMA), where it has since consolidated. 

This consolidation has formed a bull flag and a quadruple inside bar pattern above a crucial support zone near $15.20, coinciding with the 200-day SMA. Both patterns indicate bullish sentiment, with a potential breakout towards the $24 mark if GameStop breaks above the upper trendline of the bull flag on high volume. 

Conversely, bearish traders are eyeing a breakdown from the bull flag, dropping below the 200-day SMA and the 8-day exponential moving average. This would suggest a reversal, although bullish traders would look for a higher low to confirm the uptrend. 

Currently, GME stock is in oversold territory, with the relative strength index (RSI) around 75, suggesting a consolidation or a slight decline could bring it to a more balanced level. Resistance levels lie at $18.58 and $20.10, while support is between $16.20 and $13.36.

GME stock support and resistance levels. Source: TradingView
GME stock support and resistance levels. Source: TradingView

GME’s short-interest isn’t as high as thought

Despite GameStop stock having a short interest below the 20% threshold, typically considered very high, and a positive change of -8.74%, the stock isn’t seeing the expected volume of short interest from traders.

GME stock short-positions. Source: MarketBeat
GME stock short-positions. Source: MarketBeat

With the next earnings call scheduled for June 22, it remains to be seen how high GME shares can soar before the earnings report.

Buy stocks now with eToro – trusted and advanced investment platform

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts