GME Rises from the Dead - 12/14 - 12/31 Possibilities

13 Des 2020

GME



If you look at the historical option flow, from 12/10-12/12, two day after earnings missed, bearish sentiment started to decline.

12/11 option flows seem bearish but if you look at the put orders, it looks like the MMs are expecting a top of around 15 ish, bottom around 13 ish, and hedging with 8-9 ish.

In the darkpool, from 12/09 - 12/11 GM had about $20+ million worth with a spot price of $13.29-13.95.

Using the squeezer momentum divergence oscillator, GME topped out on 11/30, firing a squeeze point, and fell to a rounding bottom and into a rectangle consolidation channel, firing a second squeeze point.



Why the Dip?
GameStop Corp reported second-quarter earnings that came up short on both revenue and EPS estimates.

What Happened
GameStop reported second-quarter revenue down 26.7% year over year to $942 million. Lower store base and lower store operating days contributed to same-store sales down 12.7% in the second quarter.
“The second quarter saw strong progress toward our strategic initiatives, fueling an 800% increase in global e-commerce sales, a $133.7 million reduction in SG&A and a significant improvement in our balance sheet with $735.1 million in cash at quarter-end,” CEO George Sherman said.

Quarterly losses of $1.40 per share missed the analyst consensus estimate by 37 cents.

Why It’s Important
E-commerce growth of 800% year over year was the bright spot in the quarter and represented 20% of total net sales. GameStop was able to see 90% fulfillment rates within 24 hours of customer orders.