Can The GameStop Stock Hold Above The 50-Month-EMA Support?

GameStop Stock Is Hitting Major Support

GameStop Corp. (GME) is currently down 67% from its recent high of $64.83, now finding key support at the 50-month Exponential Moving Average (EMA), positioned at $21.12. This significant technical level could prompt a potential bounce, paving the way for upward momentum in the stock price. However, traders must consider the behavior of key indicators to gauge the likelihood of a reversal.

Technical Indicators and Trends (Monthly Chart)

• MACD: The Moving Average Convergence Divergence (MACD) lines remain crossed bullishly, but the histogram is showing a bearish decline this month, signaling waning upward momentum.
• RSI: The Relative Strength Index (RSI) hovers in neutral territory, offering no decisive bullish or bearish signals at this point.
• EMA: Despite current struggles, the golden crossover of the EMAs confirms a longer-term bullish trend, leaving room for potential upside if support holds.

GME Struggles to Break Fib Resistances

GameStop recently failed to overcome the crucial Fibonacci golden ratio resistance around $25.90, stalling its upward progress. For the past few weeks, it has maintained stability above the 50-week EMA at $20.23. Should this level give way, the next support zone lies between $15.90 and $18.60, where further downside risk could emerge.

Technical Indicators and Trends (Weekly Chart)

• MACD: The MACD lines have crossed bearishly, with the histogram turning increasingly bearish, indicating a weakening trend.
• RSI: The RSI continues to oscillate in neutral territory, neither signaling bullish nor bearish momentum.
• EMA: The death cross of the EMAs suggests a bearish mid-term trend. However, with the EMAs close to each other, a potential golden crossover could form soon, signaling a shift.

GameStop (GME) Forms A Series Of Lower Highs

Since July, GameStop has been creating a sequence of lower highs, indicating downward pressure. However, a higher low was established in August, introducing some balance to the trend. That said, the overall technical structure leans towards further downside in the short to mid-term.

Technical Indicators and Trends (Daily Chart)

• EMA: The golden crossover of the EMAs remains intact in the daily chart, suggesting a short- to medium-term bullish trend.
• MACD: The histogram continues to tick lower, hinting at a potential bearish crossover in the near term.
• RSI: The RSI remains neutral, offering no clear directional bias.

• 

Death Cross Looms in the 4H Chart

In the 4-hour chart, bearish signals dominate, indicating a strong downward bias in the short term.

Technical Indicators and Trends (4H Chart)

• EMA: A death cross is forming, where the EMAs are about to cross bearishly, confirming a short-term bearish trend.
• MACD: The MACD lines have already crossed bearishly, with the histogram reinforcing this negative trend as it ticks lower.
• RSI: Despite the bearish technical signals, the RSI remains neutral, indicating no immediate directional commitment from momentum traders.

Summary

Short-term Outlook: Bearish, with potential downside towards the $15.9 – $18.6 support zone. Key resistance sits near $25.9.

Medium-term Outlook: Bearish trend persists as GME fails to break above key Fibonacci resistance, with the possibility of a golden crossover offering a glimmer of bullish momentum.

Key Levels to Watch:

• Support: $15.9 – $18.6, 50-week EMA at $20.23, 50-month EMA at $21.12
• Resistance: $23 – $23.3, $25.9, $36.3

The stock is currently testing major support, but indicators across multiple timeframes suggest caution, with further downside likely.