GameStop
This is What Losing $250,000,000 in front of 650,000 people looks like...
Keith Gill - A.K.A. Roaring Kitty – played it incredibly cool for an investor that had 650,000 people watching him lose more than $200 million live on YouTube today. I couldn’t have pulled that performance off.
It had me wondering, is Roaring Kitty a better investor than Warren Buffett?
GameStop shares finished the day 40% lower after being halted more than a dozen times during the trading session.
The wild ride started this morning as GameStop released their earnings report four days earlier than scheduled. For the quarter, the company reported earnings per share of -$0.12 which was a wider loss than expected. Revenue for the quarter was also a miss, coming in 29% lower than the same quarter last year.
The poor earnings results were accompanied by news that GameStop has filed to sell another 75,000,000 shares of stock to raise capital. This follows last months same of 45,000,000 shares which raised more than $930 billion.
Read more about the nefarious details by clicking here
GameStop shares closed the day’s trading at $28.24, just a hair above their close of $27.67 on May 16 after the stock had made its most recent highs of $64.83. I talk a lot about the 20-day moving average – what I refer to as the “Trader’s Trendline” – which is where shares found technical support, once again displaying the power of simple trendlines.
Looking forward to Monday’s trading, expect that a break of the Trader’s Trendline will result in another rush of seller entering the market with the next support sitting at $20.
AMC Entertainment
Sympathy is the word here.
AMC shares closed the day 15% lower and just below $5, a huge psychological trigger price.
The only headline to speak of for AMC was “Theatres Offers Movie Lovers Eight Ways to Save at the Movies This Summer”, a press release from AMC timestamped 06:47 this morning.
Today’s move wasn’t headline generated, instead it represents the air of the “FOMO” and “MEME” rallies leaving the bubble.
Since May 10, AMC shares have traded as high as $11.88 (300%+) on the back of the renewed buzz around the MEME trade trend. The company has posted a better-than-expected earnings report during this rally, but nothing good enough to warrant the extent of the rally we’ve seen.
Today’s lack of evidence behind the GameStop rally has caused traders (not investors) to assess the reality of the recent moves, triggering sympathy selling in the top MEME names.
Like GameStop, AMC shares found support at their 20-day moving average, currently sitting at $4.84. The stock still closed below $5 meaning that a break below it’s Trader’s Trendline will lure more sellers to the market with a target price of 3.75.
Apple
Apple (AAPL) shares traded higher in an otherwise down market.
The stock continues its rally ahead of Monday’s Worldwide Developers Conference. The annual event is often used as a stage for new products and innovation, something that Apple has lacked in recent years.
Year-to-date, Apple shares are posting a 2.7% profit, severely lagging the 13% return of the Nasdaq 100 for the same period. The lag in stock price performance just allowed NVIDIA to overtake Apple as the second largest market cap stock in the world. Microsoft still holds that largest market cap title with a value of $3.15 trillion.
Apple shares are now trading 20% higher than their pre-earnings price of $165. The rally has shifted Apple’s 50-day moving average into a bullish trend which forecasts higher prices for the next 4-6 weeks.
That rising 50-day moving average is now preparing to cross above the 200-day trendline. That cross would form a Golden Cross for Apple shares, a pattern that traditionally results in 3-6 months of momentum for a stock.
The pressure will be on when WWDC begins. Some of the recent rally has been based on positive rumors that the company will unveil new initiatives, especially in the AI space, another area the company has seemed lacking.
Current technicals point to support at $190 for the stock on any selling pressure unless a disappointing WWDC is joined by wider market weakness.
