GME Stock Is Still a Gamble
Despite being in the S&P Midcap 400, GME stock is now falling as the short position controls the shares. This mistake has triggered a massive short squeeze rally. In late February, Fidelity Investments reported that the company had an overly bearish bet and set up the market for the massive rally. In the following weeks, Ryan Cohen joined the board, forcing the institutions to buy the stock. While there are a lot of reasons to sell the stock, there are also a number of reasons for its recent dip.
The stock’s weak fundamentals are a huge downside for this company. As a result, its IBD Composite Rating (which measures both the performance of stocks and the fundamentals of the business) is diluted. In other words, the stock lags behind 64% of all other companies. The CAN SLIM investment paradigm favors stocks with a Composite Rating of 90 or higher. The weak fundamentals of GME stock mean that the stock should be avoided altogether if you’re not willing to spend a lot of time analyzing the company.
Fortunately for investors, GME stock still remains a gamble. However, a long-term view of the company’s growth prospects is more favorable. While GME stock is still a gamble, a support line at the 10-week line could make a speculative play. As a swing trader, you can take advantage of quick gains and low losses while keeping your losses to a minimum. You can make impressive gains while minimising your risk by adjusting your position size.
GME’s meme stock has risen 36.6% since May 12, from $161 to $220. In contrast, Dogecoin has fallen by 64% from $0.50 to $0.18, indicating that its mania has spread halfway across the globe. With a high stock valuation and weak fundamentals, GME’s stock could be a bargain in the short term. In fact, it is a relatively strong buy in the long run.
On the other hand, the CAN SLIM investment paradigm prefers stocks that have consolidated for a week or two before making a move. While GME stock is still a gamble, a support at the 10-week line could be a speculative play. In swing trading, you aim for quick gains while limiting your losses. You’ll want to limit your risk by choosing a proper position size.
The GME stock has been on a tear this year. It is currently up 36.6% since May 12. While Dogecoin has fallen 64%, the GME stock has risen by over six times that amount. Its RS line has a blue line, which means it is outperforming the general market. The RS is a powerful indicator of a stock’s performance. If it rises over six months, then it is a strong performer, and it will likely continue to rise in the coming months.