The share has been falling steadily in the charts since March
It’s safe to say the stocks of GameStop Corp. (NYSE: GME) have calmed down a bit since then Reddit fueled madness That made the stock (and at times much of the broader market) volatile late last winter. In April, equity saw a relatively subdued one-month decline of 8.6% and appears to be falling steadily through May, down 16%. Of course, GME is still trading well above what it was before those speculators got their hands on the retail company, up 3,105.9% year over year. This afternoon GME is up 0.5% to $ 147.
There are indications that the stock could see an upturn in the short term as well. In a study by Schaeffers Senior Quantitative Analyst Rocky White, the data shows that GME is within one standard deviation of its 80-day moving average after an extended period of time above the trendline. GME has seen three similar moves in the past three years. A week after each of these signals, the stock was higher, averaging an impressive 60.8% return. From its current position, a move of similar magnitude would bring security just below the $ 234 level, which is near the lower end of its mid-March high.
It is clear that the extreme volatility that has broken out on the charts cannot be discounted for inflation on that five-day return, although it should be noted that the trendline has been as a trustworthy ground for GameStop acts. The $ 150 region could also provide an additional buffer as it has seen several pullbacks since March.
Short sellers begin to climb the bearish bandwagon again with GME. Short rates rose 10.5% in the last two reporting periods and now account for a hefty 20.8% of the stock’s available free float.
Meanwhile, the option pits are pricing in relatively low volatility expectations for GameStop stocks. The Schaeffer volatility index (SVI) of the security of 105% is over 7% of the measured values of the last 12 months. In other words, GME options are currently available at an affordable price.