Meme-stock mania: Will GameStop, AMC stocks surge even higher?

May 15, 2024

By ForexTime

GameStop ↑ 179% this week

↑ as much as 32.6% pre-market

2nd most traded US stock pre-market

Is meme stock craze here to stay?

Heavily bullish on D1 chart

In case you missed it, GameStop and other pandemic-era meme stocks roared back to life!

The trigger? “Roaring Kitty”, a.k.a. Keith Gill posted one cryptic meme.

Source: Twitter

For anyone asking – a meme stock is a stock that has essentially gone viral among retail investors, ignoring the core fundamentals.

To put things into context, this week:

GameStop: up 179%
AMC stocks: up 135%
Beyond Meat: 12%
Blackberry: almost 20%

Is the mania here to stay?

Well, GameStop shares rose as much as 32.6% in today’s pre-market, while AMC jumped as much as 23%! In addition, they are also the two most traded US stocks pre-market!

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A blast from the past…

The aggressively bullish price action this week certainly creates a sense of Déjà vu…

Taking a trip back memory lane, “Roaring Kitty” was at the heart of the meme craze in 2021 that saw a fierce battle between retail traders and hedge funds.

GameStop soared more than 2000% in early 2021 as retail traders banded together. As prices rose, short sellers were squeezed out of their position – fueling upside gains!

However, after peaking in January prices came crashing down within weeks as the excitement fizzled.

One of the biggest takeaways was that while meme stocks may surge due to growing interest, they may fall as fast if sentiment shifts. This was reflected in price action as GameStop gave back most of its eye-popping gains in a two-week window.

Looking ahead

If the mania continues, GameStop and AMC among other meme stocks are likely to ignore the incoming US CPI report.

How long will this mania last? It is anybody’s guess but looking at what happened in 2021, GameStop witnessed 9 consecutive days of double-digit gains/losses.

Although the current rally has nothing to do with technicals or fundamentals, the charts show that bulls are in the driving seat. More volatility could be on the cards if this mania is here to stay.