So, GameStop Corp (GME) is having a decent Monday. The stock is up, and it's not just because the broader market is feeling good (though that helps—the Nasdaq and S&P 500 were both up over 1%). The real story is what's coming tomorrow: earnings.
GameStop is set to report its fourth-quarter results on Tuesday. Wall Street analysts are expecting the company to post earnings per share of 31 cents on revenue of $1.47 billion. But here's the thing: GameStop has made a habit of surprising to the upside. The company has beaten EPS estimates for six straight quarters. Last quarter, for instance, it reported 24 cents per share against an estimate of 18 cents. That kind of track record gets people's attention, especially the retail crowd that follows this stock closely.
Short Sellers Take a Small Step Back
Another piece of the puzzle is what the short sellers are doing. According to market data, short interest in GameStop recently decreased from 66.88 million shares to 65.62 million shares. That still represents about 16.04% of the company's available float, and it would take short sellers roughly 14 days to buy back all those borrowed shares if they needed to cover their bets quickly. But the direction is lower, which can sometimes take a little pressure off the stock.
What the Charts Are Saying
From a technical standpoint, the picture is mixed. GameStop is trading about 3.8% below its 20-day simple moving average, which suggests some near-term weakness. However, it's still holding 1.7% above its 100-day moving average, indicating a somewhat firmer longer-term base. Over the past year, the stock is down about 10.33%, and it's trading closer to its 52-week low than its high.
Other indicators tell a neutral-to-weak short-term story. The Relative Strength Index (RSI) is at 37.70, which is in neutral territory. The Moving Average Convergence Divergence (MACD) is negative at -0.1190 and below its signal line. For traders watching key levels, $24.00 looks like a resistance point to overcome, while $22.00 serves as a support level.
Putting it all together, GameStop shares were up 1.71% at $22.96 on Monday. The move sets the stage for what could be another interesting earnings day for a stock that never seems to have a dull moment.
