With the recent bankruptcy of Evergrande, forcing the liquidation of its many short positions, rumored to include equities like GME, AMC, etc., many traders are expecting another brief 'short squeeze' as a result.
The charts seem to indicate that GME could make a nice move from current levels ($14.75), possibly even dropping to the bottom of the wedge to the $13.90ish level before bouncing to the upper trend line (white dashed line) to approximately the $18.42 level in the next 15 to 20 days (mid-February), followed by what I believe will be a sharp reversal from that level to a downward move over the 2 to 3 weeks following, back down to the $11.83 level.
If GME falls below the $11.83 level (lower white dashed line) on the charts, we could easily see the price drop below the $10 level.
If you study the chart, GME is pretty consistent about making a move, falling back, then retesting at or near the top of the previous high before pulling back, which in some cases gives you a chance to break even on a bad trade or even double-tap a successful trade.
Either way, GME can blow the doors off any size account if not traded with due diligence. No potential gain is worth blowing out your account. Great traders trade with discipline, and disciplined traders stand the test of time because they never put their ability to trade at risk. I personally never put more than 25% of my account at risk on a single trade.
Don't take these charts as gospel, but don't ignore them either! There are two types of traders in my books: followers/copy-traders and leaders/trail-blazers. Which one are you?
Good luck, and always use a stop or a buy-limit hedge!
The charts seem to indicate that GME could make a nice move from current levels ($14.75), possibly even dropping to the bottom of the wedge to the $13.90ish level before bouncing to the upper trend line (white dashed line) to approximately the $18.42 level in the next 15 to 20 days (mid-February), followed by what I believe will be a sharp reversal from that level to a downward move over the 2 to 3 weeks following, back down to the $11.83 level.
If GME falls below the $11.83 level (lower white dashed line) on the charts, we could easily see the price drop below the $10 level.
If you study the chart, GME is pretty consistent about making a move, falling back, then retesting at or near the top of the previous high before pulling back, which in some cases gives you a chance to break even on a bad trade or even double-tap a successful trade.
Either way, GME can blow the doors off any size account if not traded with due diligence. No potential gain is worth blowing out your account. Great traders trade with discipline, and disciplined traders stand the test of time because they never put their ability to trade at risk. I personally never put more than 25% of my account at risk on a single trade.
Don't take these charts as gospel, but don't ignore them either! There are two types of traders in my books: followers/copy-traders and leaders/trail-blazers. Which one are you?
Good luck, and always use a stop or a buy-limit hedge!
Comment:
Here's a closer look at the wedge forming at current price levels on the 15 min chart.
Comment:
Here's a closer look of the wedge forming at current price levels on the 1 hour chart.