Breaking News

GameStop Stock Hits Highest Closing Price in Weeks: Is Roaring Kitty Sparking a New Squeeze?

Since early May, GameStop’s stock has mostly been on an upward trajectory. Over the past month, the video game retailer’s stock has surged by 75.29%. On Wednesday alone, it jumped by 19.13% on the NYSE, closing at $31.57 – the highest closing price in nearly three weeks. However, in pre-market trading on Thursday, the stock briefly dipped to $31.11, down 1.46% from that level.

Gamma Squeeze at GameStop: Are Retail Investors Following Roaring Kitty Again?

There haven’t been any new major announcements, but the GameStop stock continues to be driven by the return of Reddit user Keith Gill, also known as Roaring Kitty. Gill, who played a key role in the 2021 meme stock rally, posted a screenshot on Sunday showing that he owns around five million GameStop shares and 120,000 call options with a strike price of $20, expiring on June 21. Following this, GameStop’s stock briefly soared to $40.50 in US trading on Monday.

Are Short Sellers of GameStop Stock in Trouble Again?

The news site also suggests that a gamma squeeze at GameStop could be followed by a typical short squeeze, where short sellers are forced to buy shares to cover their positions due to a strong price increase, avoiding substantial losses. For this to happen, significant technical levels that often act as stop-loss points for short sellers would need to be breached. Recently, GameStop’s stock has generated two strong buy signals from a technical perspective, making it possible for the stock to surpass its previous yearly high of $40.50 and trigger these stops.

Investors should remain cautious, however, as despite GameStop’s positive performance since the beginning of the year, the stock remains highly volatile. The price gains are not supported by the company’s rather dire business performance.