GameStop Stock Continues Climb Before Earnings

The equity has a history of moving lower after earnings

Deputy Editor
Jun 9, 2021 at 10:36 AM
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The shares of GameStop Corp. (NYSE:GME) are extending their premarket gains, last seen 2.4% higher to trade at $307. The proverbial "meme" stock is in large part responsible for the latest craze among retail traders, so it will be interesting to tune into GameStop's upcoming first-quarter earnings call, slated to take place after the close today. Below, we'll take a look at the stock's current technical setup, and dive into what the options market is pricing in for the video game retailer's post-earnings move.

The Reddit-fueled trading frenzy has pushed GameStop stock higher on more than one occasion over the course of the year, with spikes above the $340 level occurring in January, March, and June. It's most recent run up the charts has been aided by the ascending 80-day moving average. Boasting an incredible 5,966.8% year-over-year lead, GME is pacing for its fourth-consecutive week of gains. 

Regarding the security's earnings history, GameStop stock has closed lower the day after reporting in all but one of the past eight quarters. In fact, its last three quarterly reports have resulted in drops of 33.8%, 19.4%, 15.2% respectively. Over the past two years, the shares have swung an average of 16.9% the day after earnings, regardless of direction. This time around, the options market is pricing in a much higher 28.6% swing for Thursday's trading.

Lastly, short interest is on the rise, up 7.7% in the last two reporting periods. The 11.97 million shares sold short account for a healthy 21% of the GameStop stock's available float.

 

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