Three Stocks: GameStop, Rivian, and AMC

GameStop

Today’s move in GameStop (GME) shares couldn’t have been scripted any better.

Shares were off to a flying start ahead of the open as the trader known as “Roaring Kitty” posted a cryptic drawing of a person leaning forward in a chair with a gaming control in their hand.

The image was all the MEME Army needed to jump into action, bidding shares more than 100% higher, triggering a halt on the stock for volatility per exchange rules.

Shares of other MEME stocks like KOSS (KOSS), AMC Entertainment (AMC), and Tupperware (TUP) ripped higher, none on fundamental news or developments other than speculation.

GameStop finished the day 75% higher on volume that was eight times heavier than the last month’s average. The move added $4 billion in market capitalization to the company, almost doubling the company’s value.

All technical measures of the stock call for a reversion to the mean trade that should settle the stock back to a price of $20. That said, the power of the FOMO trade may hold the stock’s prices at their over-inflated levels.

For more on today’s move and the dangers associated with it, read about how GameStop’s rally just made these three stocks “dangerous.”

As far as the stock goes, watch for a move back below $25 to trigger a “take the money and run” selloff that will push GME shares back to $15 and likely lower.

gme stock chart

Rivian  

Shares of Rivian (RIVN) and other American-based EV manufacturers surged higher today on news that the Biden Administration was set to raise tariffs on Chinese EV imports.

Tariffs on Chinese EVs is currently just over 25% with the new rate heading towards more than 102%. The move would form a firewall to keep the cheaper Chinese vehicles from imploding EV prices for U.S. manufacturers as they continue to develop their manufacturing infrastructure.

Rivian stock moved above $11 this afternoon, closing roughly 30% above its recent lows around $8.

The recent rally has shares trading above their 20- and 50-day moving average, something that the stock hasn’t done since late January. The move came on better-than-average volume.

Short-term bullish traders will target the $12 price as the stock’s target after breaking above $11.25, recent resistance for the stock.

rivn stock chart

AMC Entertainment Holdings  

AMC (AMC) shares found themselves another target of the MEME crowd today as the stock closed the day more than 70% higher on heavier trading than normal.

Prior to today’s move, AMC shares had broken back below the $3 price level after weeks of support from this round-numbered price. The move came as investors weighed the outlook for the summer “Blockbuster Movie” season after a number of new releases were met with light interest and ticket sales.

The options market appears to be calling shenanigans on today’s rally as traders focused their attention to the June $5 puts and lower strikes, forecasting a return to prices of $3.50 and lower.

Keep in mind that option volatilities have increased dramatically based on the uncertainty of AMC and other MEME stock’s moves. This means that investors will pay more than normal to speculate on lower prices.

Watch for a break back below $5 to trigger a 20% decline to $4 followed by another deflation of the stock to $3.

amc stock chart

About the Author

Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.

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