GME tumbled after uneventful annual meeting: Is the hype fading?

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AkLi joined discussion · May 13 12:03

GameStop DeepCharts [What RoaringKitty Might See] (Short Interest, Options Flow, Company Performance, Insiders, and more)

Date: 05/13/2024

DeepCharts Counter: 6

Introduction

Good morning everyone, and welcome back to the DeepCharts series! I hope you all have had a relaxing weekend and are gearing up for a new week in markets.

On Sunday, some breaking news came across the wire which alerted me that the famed and seasoned short-squeeze opportunity investor RoaringKitty (aka DeepF*ckingValue) has posted a tweet for the first time since 2021.

Naturally, I quickly checked out what was mentioned and found the following post:

GameStop DeepCharts [What RoaringKitty Might See] (Short Interest, Options Flow, Company Performance, Insiders, and more)

Although his post seems to be suggesting he is now getting serious about something, his post actually refernces a post created by the official GameStop twitter acount in earlier in February on the year.

RoaringKitty had changed the colors of the photo to possibly avoid copywrite, but maybe because GameStop's colors are Red and Black as well as Red and White.

Many investors and traders are taking this as a signal of RoaringKitty's public statement of his return to markets, with GameStop as a focus. Although, his stock of choice has yet to be determined. As a result, there has been considerable attention directed towards $GameStop (GME.US)$ and $AMC Entertainment (AMC.US)$ as investors wait for further confirmation from DeepValue himself.

Article Breakdown

Before I begin, let me go over what I will be talking about in today's article.

Section 1:

Charting

Trends

Sentiment

Section 2:

ORTEX Short Interest

ORTEX Live Short Interest

ORTEX Official Short Interest Report

ORTEX Options Open Interest

Put/Call Ratio

Section 3:

GameStop Performance

Insider Trading

(For reference: I will be referring to GameStop as GameStop or GME. I will be referring to RoaringKitty as RoaringKitty, Keith Gill, DeepF*ckingValue, DeepValue or Keith).

Quick About Me

For those who are just discovering me or my articles, my name is Alkaline and I am a freelance analyst and MooMoo's newest and smallest (by follower count) Moo Contributor. I am mostly a Futures trader, but I also trade Stocks and I dabble in Options here and there.

I post different educational articles in markets such as DeepDives, DeepCharts, DeepIndicators, market sentiment, and much more. Your likes, coments, shares and follows motivate me to create articles like these and I could not be more grateful for all of you.

With that said, let us get right into the charts!

Section 1 | Part 1: Charting

GameStop Weekly

From the weekly, there are a few different indicators and structures forming.

Analysis:

There was a symmetrical descending (isosceles) triangle which brokeout to the downside slightly

Since the rejection to the downside, there has been a descending channel on the weekly hitting the lows of $9.95 in april on the year

The RSI is now approaching overextension to the upside, but in a state of continuation for now

The VI is starting to reverse to the upside

There are HEAVY Weekly sellers at the $26.70 - $30.41 range and the $33.89 - $40.48 range

-These selling orders have been in place since 2022, so I think it is safe so say this is hedge pressure (selling pressure from hedge funds to keep the price lower), or big money looking to sell the price should it ever reach the levels again.

GameStop Daily

There are no notable structures forming, but as you can tell the price is squeezing to the upside blowing past the selling liquidity. This tells me that not all the short orders have been filled due to the volume and speed of the stock moving to the upside.

Analysis:

Over 35 MILLION orders hit the tape since Tuesday, April 16th at the price of $10.21

-Whether or not these orders are from DeepValue is unknown.

The RSI had a technical breakout to the upside and is now approaching overextension

The VI upper band is curling downwards, however the lower band is also moving dowards. That tells me this priceaction is an anomaly and not normal and there could be a reversal on the day or week

There is now a buyside gap from the daily close of $18.00 last friday to the open today at $26.40

The sellers are at the $27.60 - $29.73 range and the $40.41 - $44.45 range

The price of GameStop is up 102.84% since the close on Friday

GameStop 4 Hour

There are no notable structures on the 4 hour, however there was a retest and rejection of the upper Weekly descending channel during premarket on the day.

Analysis:

The next selling orders on the 4 hour are up there at the $40.41 - $44.45 range, which means these orders are Daily sellers and therefore heavier sellers

-This also means this area could act as strong resistance to the upside.

The RSI is overextended to the upside

The VI upperband is neutral, but the lowerband is moving to the downside

The high on the day so far is $38.20

GameStop 1 Hour

The price is rejecting off the highs as selling orders are trying to get filled or liquidated. There is not a notable structure here on the 1 hour yet.

Analysis:

The RSI is reversing off of the overextension from pre-market and the MOO

The VI is diverging where the upperband is moving to the upside , but the lowerband is moving to the downside

-If the lowerband begins to move sideways, and the upperband begins to move to the downside there could be a technical reversal (correction) in the price on the day.

There are no notable areas of buying liquidity or upside support for the price on the day or on the 1 hour

There are no notable areas of selling liquidity or downside resistance for the price on the 1 hour

Markets are currently dragging the price of GME lower on the day

GameStop 15 Minute

As some of you know, I look for intraday trades based off of formations on the 15 minute a lot. There are no significant structures on the 15 minute.

Analysis:

GameStop has just opened its new 15 mintue candle under the second upside candle on the day since the MOO at the $29.84 level

-This tells me that the next 2 15 minute candles will tell me whether or not the $29.84 level is a level itself and whether or not it is an area of support fo the price or an area of resistance should the candles close below it.

The RSI has cooled off, but begins to make another push for more upside continuation

The VI lower band is starting to approach the upperband suggesting a possible reversal of the price on the day

-This reversal could also be correction as the price begins to reach its "fair" value.

There are buyers down there at the $20.23 - $20.62 range

There are no notable sellers on the 15 minute

GameStop 5 Minute

There was an upside gap which got filled within 20 minutes (4 candles) on the day.

Analysis:

The gap is now acting as resistance for the price

The current 5 minute candle is a battle between buyers and sellers, which will futher confirm the GME price sentiment and whether or not the gap will act as support or resistance for the price.

The RSI reversed off of its overextension to the upside and is now bullish neutral

The VI is neutral

Looks like the byers are trying to take control of the tape looking at the change of the volume from bearish to bullish

-There could be another push to the upside with large buying volume here, however because it was switching from bearish to bullish, that tells me the volume is pretty equal to both sides. Buyers will need more volume to sweep the sellers past the gap.

The gap continues to act as resistance on the 5 minute chart

There are no notable areas of selling liquidity on the 5 minute

There are buyers down there at the $23.06 - 23.35 range

GameStop 1 Minute

There is a possible bear flag on the 1 minute as the gap continues to act as resistance on the price.

Analysis:

The RSI is approaching neutrality after the squeeze to the highs from the MOO

The VI is neutral, however at this level the price could either reject or move to the downside as the lowerband beginst to curl upwards

The price is currently retesting the bearflag

-If it fails the retest, there could be more downside on the day in the form of a technical correction

There is no notable area of selling liquidity on the 1 minute yet

There are buyers down there at the $20.44 range, $20.73 - $20.89 range, $23.06 - $23.29 range, $24.02 - $24.15 range, and $24.23 - $24.52 range.

The bearflag is playing out

Section 1, Part2: Trends

Overall, the trend of GameStop is not clear. From the larger time frames, it seems like the trends are overall bearish and I think it is correct.

As sell orders begin to fill at the daily liquidity we found at the $27.60 - $29.73 range, from a techncal point of view, the price should atleast retest the gap from the MOO to the downside then reverse upside.

However, buyers don't want this retest on the day. I think if the price move sideways, then the trend wil be more bullish than bearish with a decent probability.

A retest and rejection looking like this will not only fill the gap, but allow buyers to enter at a better price as well as provide further confirmation of more upside.

Then again, daily candles are hard to predict and we could end up just moving straight to the upside. However, I don't see how the price moves lower than the $9.95 lows unless RoaringKitty comes out and mentions his focus is not on GameStop.

Section 1, Part3: Sentiment

Since the squeeze of 2021, GameStop has maintained its bullish golden cross. This tells me that the overall sentiment for GME is bullish. I think that is also supported by the amount of loyalty in the GME community. Whether the price moves to the upside or downside, there are always investors looking for the next bullish move. In other words, a lot of investors have not lost their faith in GameStop yet.

Resulting in an overall bullish sentiment around GME. Now with RoaringKitty announcing his possible return to markets, that sentiment may become even more bullish should he mention that the focus of his next investment is about GameStop.

If Keith mentions that GameStop is not his target stock, then that sentiment could change fast and we might see lower lows in the stock.

Which brings me to the next section, if he is going to be focusing on GameStop, what might be be noticing?

Section 2, Part 1: ORTEX Short Interest

The FreeFloat on loan and shorts on loan are both huge at around 36% and 97.28 million orders respectivly

The Cost To Borrow is higher than the current cost of the stock by slightly over $6 more

ORTEX estimates that the current short interest for GME is around 66.84 million shares

ORTEX extimates that the amount of short interest is around 24.92% of the total FreeFloat

ORTEX estimates that the confidence in the current price of GME is supported by 61.2M - 78.81M shares traded which is over 80% of the total volume traded on the day

ORTEX estimates that the confidence in a the current price move of GME is supported from $22.86 - $29.29 is upper neutral or right around the middle of the range.

Shorts have only a few days to cover over 3M contracts on loan

Section 2, Part 2: ORTEX Short Live Interest

ORTEX's live short interest is suggesting that there is a lot of sellers exiting their positions as the live Cost To Borrow explods over 17.46%. RoaringKitty's post could be a result of shorts losing interest or fire selling to avoid being blown out by a possible squeeze in the price.

ORTEX is also showin that there are less shares to borrow for GME, which intern also increases the price to try and borrow any. Since the supply is low, the demand will result in a higher price to borrow.

Section 2, Part 3: ORTEX Official Short Interest Report

Section 2, Part 4: ORTEX Options Open Interest

17 May 2024 Contracts

24 May 2024 Contracts

31 May 2024 Contracts

07 June 2024 Contracts

14 June 2024 Contracts

21 June 2024 Contracts

28 June 2024 Contracts

19 July 2024 Contracts

18 October 2024 Contracts

17 January 2025 Contracts

20 June 2025 Contracts

16 January 2026 Contracts

Analysis:

There is a LOT of call open interest appearing, some of which are long term contracts. For example, calls at the $40 strike price span from June 21st 2024 all the way to July 19th 2024.

As for closer date ranges, a lot of OTM calls are hitting the tape. Which could be investors and traders trying to get in for cheap before a possible move to the upside.

Remember, the more news and popularity surrounding another DeepValue GME short squeeze, the more expensive the options contracts get. This could be investors trying to not only get in early, but before a possible uptick in the options underlying buy price.

Section 2, Part 5: Put/Call Ratio

Since November 2022, there has not been any real interest in call options. With puts being held from the lower highs, there was no real change in options flow until around February of 2024 where puts sold for profit and some calls entered, However, puts quickly hit the tape again causing the price to go lower as call contracts began to sell again.

This also correlates to price effenciency. The more open interest puts or calls have, the higher their initial price value would be. Since market makers want the most money, the price to enter puts would be higher the more skewed the put/call ratio is.

That would make calls at the current level "dirt cheap".

At the current price and level, the ratio is beginning to shift suggesting that there could be more interest now in calls. If this is true, the blue line will continue to reach the candles or excede it. Signaling a decrease in put interest and increase in call interest.

That would make calls become "more expensive" to purchase.

If you are curious about what the graph actually says and how to interoperate it better, I wrote a whole article explaining more in-depth about how the put/call ratio works. You can read that here.

For Followers (SPY Data) (Advanced)

Section 3, Part 1: GameStop Performance

Sources:

gamestop.com/ne...

Q4 Overview:

Net Sales Q4: $1.79 Billion vs $2.226 Billion YoY

Selling, general and administrative expenses Q4: $359.2 million, or 20.0% of net sales vs $453.4 million, or 20.4% of net sales Q4 YoY

Net Income Q4: $63.1 million vs $48.2 million YoY

Cash on Hand Q4: $1.199 billion at the close of the quarter

Longterm Debt Outlook: remains limited to a low-interest, unsecured term loan associated with the French government's response to COVID-19

Full Year Overview:

Net Sales: $5.273 billion for fiscal year 2023 vs $5.927 billion for fiscal year 2022

Selling, general and administrative expenses were $1.324 billion (25.1% of sales) for fiscal year 2023 vs $1.681 billion, or 28.4% of net sales, for fiscal year 2022.

Net Income: $6.7 million for fiscal year 2023 vs net loss of $313.1 million for fiscal year 2022

Adjusted EBITA: $64.7 million for fiscal year 2023, compared to adjusted EBITDA of ($192.7) million for fiscal year 2022.

Q3 2023 Overview:

Net Sales Q3: $1.078 billion vs $1.186 billion Billion YoY

Selling, general and administrative expenses Q3: $296.5 million, or 27.5% of net sales vs $387.9 million, or 32.7% of net sales Q3 YoY

Net Income (loss) Q3: loss was $3.1 million compared to a net loss of $94.7 million Q3 YoY

Cash on Hand Q4: $1.210 billion at the close of the quarter

Longterm Debt Outlook: remains limited to a low-interest, unsecured term loan associated with the French government's response to COVID-19

NO CONFERENCE CALL WAS HELD

Analysis:

Overall, it would appear that on the front end, GME performed much better Q4 than they did in Q3 of 2023, however they still performed worse in some areas compared to the previous year.

This could partially be because of the gifting / heavy spending days that are in Q4 such as Black Friday, Cyber Monday, Hanukkah, Christmas, New Years, and many more. Despite those, their income was still less than 2022's. That could be as a result of numerous things such as their business model, popular game releases, individuals returning to in-person work, and the disatisfaction of newer game releases.

HOWEVER

Similar to the PS5 and Xbox Series X, there is a NEW console set to launch possibly later this year or in 2025. The Nintendo Switch 2.

Nintendo Switch 2: Official announcement promised within next year

With the estimated release date in Q3 - Q4, with the latest being Q1 of 2025, this could absolutely boost sales for GameStop as users try to purchase it for the holidays at full price or a discount. Highly convenient release time should it be in Q4 around BlackFriday.

In terms of what GameStop actually sells, Hardware and Accessories is at the top of the list.

I can now see why there is a lot of open interest for calls expiring later this year and into early 2025.

Regardless, it looks like there are a bunch of different areas where GameStop is improving, improving better than expected, or exceeding. There are of course areas that need work, but overall GameStop has done well all things considered. 2024 could prove to be a turning point for GameStop's profitability with the release of new consoles and games, but also could lead to more cash on hand and a decrease in debt.

Section 3, Part 2: GameStop Insiders

Ryan Cohen seems to have been buying up shares since 2022 under the radar.

In fact, over the last 12 months, insiders have been purchasing HUGE amounts of shares compared to insiders selling. Over 10M worth of shares were bough alone by 11 different transactions and only 401,000 worth of shares were sold spanning over 3 trades.

In other words, more insiders have been buying large (interms of quantity of insiders and amount traded) for the past 12 months than insiders selling (interms of quantity of insiders and amount traded). A very bullish indicator I am not sure many have noticed yet except those who look.

Conclusion

Whether or not RoaringKitty is focusing his next investment or not on GameStop, I think there is other underlying indicators which could support the potential purchase of the stock from a technical standpoint and company fundamentals.

Regardless, GameStop rallied this morning over 100% causing shorts and sellers alike to scramble and try to get out of the way as a result of DeepF*ckingValue's possible return to markets.

What he might be eyeing when it comes to game stop is the release of new consoles, GameStop's quarterly performances MoM and YoY, and the fact that insiders seem to be buying shares far more than other insiders are selling them.

In terms of overall short interest, the remaining shorts to borrow is 0 (remarkably cooincidental), however the overall short interest % rate is relativly low, and incredibly low compared to the over 100% short interest (somehow) before the famous GameStop squeeze RoaringKitty lead a while ago.

Whether or not the stock is GameStop itself, there is a stock out there that I think RoaringKitty sees value in, and the chances of it not being GME is higher than most may expect. There are a bunch of stocks out there to choose, so it does not have to be GameStop, but his post does suggest that it is.

I took a sizable look into the company and did find some interesting numbers, values, and metrics, however personally I am not sure if GME is his focus. Until he mentions that GameStop is in his sights once again, investors and traders can only speculate.

I hope I was able to help with some of that speculation!

Thank you for reading and all of the support you have shown me as we continue to march forward towards the 5,000 follower goal! I hope you all enjoy your week in markets and are getting ready for RoaringKitty's next announcement.

At the time of writing, GameStop is at $29.400

$GameStop (GME.US)$ $AMC Entertainment (AMC.US)$ $SPDR S&P 500 ETF (SPY.US)$ $Tesla (TSLA.US)$ $Apple (AAPL.US)$ $NVIDIA (NVDA.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Polygon (MATIC.CC)$ $Meta Platforms (META.US)$ $Dow Jones Industrial Average (.DJI.US)$ $Nasdaq (NDAQ.US)$ $Bitcoin (BTC.CC)$

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Dream Weaver : thank you, its a very interesting piece well written. lets hope your analysis that even without RK involvemwnt the company fundamentals can generate investors' interest to buy it up, and hold long term like the instirutions.

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AkLi OP Dream Weaver : Thank you!

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AkLi

Moo Contributor

Alkaline Analyst All Deep Dives: https://medium.com/@alkalinedeepdives

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