GameStop Stock Price Sets New Monthly Low After Losing -5% on Tuesday, GME Short Volume Hits Highest Point Since Oct 2022

 Key takeaways

• GameStop (NYSE:GME) released its Q2 earnings report on 6th September, beating Wall Street’s expectations but still showing weakness year-over-year
• An X user has shared key information about GME’s open trading volume, with 82.89% of all volume being short positions
• The CoinCodex algorithm expects GME to form a new yearly low before a +50% recovery bounce

GME short volume hits highest point since October 2022

GameStop (NYSE:GME) traders have opened the highest volume of short positions since October 2022, as reported by @GavinClimie on X (formerly Twitter). This comes after the company released its Q2 earnings report on 6th September, where the company reported an earnings per share figure of $0.03 — a 121.6% reduction YoY.

? #BREAKINGNEWS ?$GME Short Volume Was 82.89% on the 1,825,028 Shares Traded Yesterday, With 80.84% of Going Off-Exchange

This is the Highest Short Percentage Since 19/10/2022#GME #DRS #MOASS ??‍☠️ pic.twitter.com/FPxCsMW5KH

— G-MAN (@GavinClimie) September 22, 2023

Despite a disappointing year for GameStop, its Q2 earnings beat Wall Street’s expectations. The company reported $1.16 billion of revenue after analysts anticipated a $1.14 billion figure, which marked a quarterly revenue increase of 2.4% YoY. GameStop’s revenue was buoyed by strong demand for video games in recent months, with software and collectibles accounting for 49% of total revenue during Q2.

The GME stock price has fallen 9.46% since the Q2 earnings report was released on 6th September, and the recent report on X has revealed that 82.89% of the total trading volume for GME on 21st September was short. This is the highest volume of GME short positions open since October 2022.

GME historical short volume, via @GavinClimie on X

GME price down 5.04% today, algorithm predicts +53% bounce before December

The GME price has fallen 9.98% YTD, including a 5.04% reduction on 27th September 2023. GME now finds itself at the bottom of a multi-month range, re-testing a double bottom that was formed at the $15.60 price level in January and March of this year.

At the current price of $16.92, GME has now remained close to its annual lows for 13 successive days. The CoinCodex price prediction algorithm expects GME to fall below this support level in the coming weeks, with a new annual low of $14.26 forecasted for 3rd October.

However, the algorithm expects this low to mark a key turning point. By December 2023, GME is forecasted to bounce by more than 50% in a move that would take the stock price to $25.76. In total, this would be a 53% recovery from the current downtrend.

3-month price prediction for GME, via CoinCodex

Bottom line: GameStop may be approaching key price level, recovery expected before end of year

GameStop’s 82.89% short volume is its highest in 2023, indicating that traders are overwhelmingly expecting downside in the near term. Recent price action aligns with this sentiment, with the stock teetering close to the edge of a major support level without showing signs of a reversal in recent weeks.

The CoinCodex algorithm expects GME to fall below this level in the coming days before forming a new yearly low. From here, GME is expected to regain some strength and post a +50% recovery before the year ends.

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