Meme Stock GameStop Keeps Dominating

Meme stocks have received renewed media attention, but the drama surrounding GameStop seems to overshadow potential trading opportunities in other companies.

The GameStop Movement

GameStop is notably associated with the earliest meme stock trends, sparked initially by Keith Gill (known to traders as Roaring Kitty), giving this situation a significant background. Following the first short squeeze that brought meme stocks wider attention, Gill became less visible. His return now seems to have generated more controversy than market reaction, as early bumps in stocks like GameStop quickly faded. The company took advantage of the anticipation around his first livestream in three years to twice issue more shares and bolster its cash reserves, but it still saw its shares sharply declining by 40%. In the meantime, shares of other meme stocks, such as AMC, dropped 7%, and Koss fell 4%.

Does this mean meme stocks have definitively ended? While GameStop's share price has recently fallen, it remains up 37% year-to-date even as the company continues losing money. Therefore, the meme stock dynamic has not fully disappeared, but the market appears considerably calmer, with impulsive retail trader moves becoming less frequent.

Any Market Potential?

A short squeeze drove GameStop's rise to fame, as several institutional investors had shorted the stock during a period when the company was losing money and customers were shifting to online game purchases. However, social media traders were able to identify other companies facing similar struggles that had also been heavily shorted, such as AMC. While this allowed many online traders to gain at the time while others lost, it also alerted institutional investors to this vulnerability. Stocks that had been oversold quickly gained attention from more than just social traders, reducing the potential for further short squeezes.

However, GameStop's sustained high prices and the ongoing volatility in other meme stocks indicate interest has not fully declined. Not all companies can be protected against short selling, though. Retail traders also continue seeking new opportunities beyond short squeezes, as shown by recent GameStop moves that are not aimed at a short squeeze. Traders watching out for the next meme stocks sensation have various online tools to monitor social media and identify stocks garnering interest from retail traders. Still, this does not reduce the inherent risks of trading.

​CINEMARK Features H&Ss

Cinemark's share price may have formed two inverted head-and-shoulders (H&S) patterns at $13 and $16, subject to further increases towards $21 and the projected high of $27 from the shoulder level, contingent on a potential takeover of $23.30. Failure to sustain the uptrend from recent lows, breaching $13 could allow for decreases to $8.30, if support at $11.75 is broken.

Source: SpreadEx / CINEMARK

Key Takeaways

Meme stocks such as GameStop have received renewed media attention, but the focus on the meme mania leader overshadows opportunities in other companies. GameStop sparked initial meme stock trends and remains up 37% YTD despite losses, showing the dynamic has not disappeared. While short squeezes allowed gains on others' losses, awareness reduced this potential. However, volatility in meme stocks like GameStop indicates interest has not fully declined. Retail traders continue seeking opportunities beyond short squeezes, with various online tools helping monitor interest and identify potential meme stocks, but inherent trading risks remain.