For the better part of a week, GameStop (GME) has been the biggest name in finance. An American video game and electronics retailer, GameStop operates more than 5,500 stores in North America. Shares of GME stock have posted a meteoric five-day rally, from a low of $42.59 to a high of $469.42.
The epic spike in GME is reportedly due to a collusion of retail investors driving a massive short-squeeze on hedge funds. A short-squeeze is a swift jump in asset pricing, which prompts net-short traders to liquidate their positions. The result is a glut of buying and bullish price action.
Today has been a different story ― GME is off more than $100 per share and down nearly 30%. As of now, trade of GME stock has been halted repeatedly in an attempt to restore order. In addition, retail stock trading platform Robinhood has locked out traders from purchasing shares of GameStop. On Capitol Hill, House Speaker Nancy Pelosi has stated that “we’ll all be reviewing it,” alluding to a possible investigation.
For holders of GameStop stock, it’s been a roller coaster ride. Hedge funds that were shorting GME have taken massive losses, estimated to be upwards of $5 billion. One thing is for sure ― when hedge funds lose big, increased regulation is right around the corner.
USD/CHF Holds Firm As GameStop Crashes
Here are the key levels to watch as we head toward the weekend:
- Resistance(1): 38% Current Wave, 0.8929
- Support(1): Swing Low, 0.8757
Bottom Line: Right now, a downside bias is appropriate toward the USD/CHF. If rates fall in the coming days, a long trade may set up from the weekly Swing Low (0.8757). Until elected, I’ll have buy orders in the queue from 0.8761. With an initial stop loss at 0.8721, this trade produces 40 pips on a standard 1:1 risk vs reward ratio.
Go to the news source: GameStop Short-Squeeze Remains Top Financial Story