quantguy

Massive Upside Potential

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NYSE:GME   GameStop
Although GME recently broke out of a pennant pattern recently, it had little follow through in terms of momentum to the upside. It seems to be having some trouble breaking the $15.50 level, which corresponds to the upper bound of the Kovach Reversals Indicator. There also seems to be a strong level above that at the psychological $16.00 level. After that, you'll find a vacuum zone to the $18.00 handle.

In further support of a bullish correction is the fact that we we seem to be seeing a long term inverse head and shoulders pattern forming on 1 day charts, which is still visible on the 4 hour charts.

However, the Kovach OBV does seem to be waning and the Kovach Chande has taken a dip. This suggests momentum may have exhausted and we could retrace a bit. Levels of support from below include the central moving average of the KRI at $15.10, a level at $14.70, and the lower bound of the KRI at $14.30 or so. $14 seems to be a strong psychological level.

In conclusion, although there does seem to be a lot of upside potential for GME, it would be wise to wait for entry one of the levels from below outlined above.

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