GameStop (GME) shares popped practically 8% in prolonged buying and selling on Thursday after a report that the brick-and-mortar online game retailer turned meme stock is contemplating investing in bitcoin (BTCUSD) and different cryptocurrencies.

The corporate is weighing up whether or not to put money into alternative asset classes, together with crypto and bitcoin, CNBC reported citing sources after Thursday’s closing bell.

The report follows GameStop CEO Ryan Cohen posting a photo of himself with Michael Saylor, cofounder of MicroStrategy (MSTR), the biggest company holder of bitcoin. Nonetheless, Saylor just isn’t presently a part of GameStop’s dialogue about crypto investments, CNBC reported.

GameStop shares, which rose to dizzying highs throughout a pandemic-era meme inventory buying and selling frenzy, commerce down 16% because the begin of the 12 months as of Thursday’s shut however have gained greater than 85% over the previous 12 months, partly, from social media influencer “Roaring Kitty,” aka Keith Gill, reigniting interest within the inventory.

Under, we break down the technicals on GameStop’s chart and establish key value ranges that buyers could also be watching out for.

Falling Wedge Breakout

Since hitting a seven-month excessive in early January, GameStop shares have consolidated inside a falling wedge, a chart sample that indicators a transfer greater upon a breakout above the formation’s higher trendline.

That breakout appears set to happen in Friday’s buying and selling session after in the present day’s information of potential cryptocurrency investments surfaced.

It’s additionally value noting that though the relative strength index (RSI) has a studying under 50, the indicator has risen from close to oversold ranges earlier this month, indicating bettering value momentum.

Let’s establish a number of key overhead areas that would come into play amid additional upside and level out an necessary support level value monitoring throughout retracements.

Key Overhead Areas to Watch

Firstly, buyers ought to regulate the $29 degree. The shares might run into promoting strain at this vary close to a horizontal line that hyperlinks a spread of comparable value factors on the chart extending again to final 12 months’s July swing high.

Shopping for above this degree might gasoline a transfer as much as the $32 area. Traders who’ve accumulated shares a decrease costs might search for exit points round this level close to a number of peaks located just under the inventory’s January excessive.

To forecast a price target above this 12 months’s excessive, buyers can use the bars sample software. When making use of the evaluation, we take the inventory’s trending transfer greater from October to January and overlay it from the falling wedge sample’s high trendline. This initiatives a possible upside goal of round $42, a degree about 60% above Thursday’s closing value the place buyers might resolve to take profits.

Curiously, the prior development adopted an falling wedge sample on the chart, serving to present perception into how a future transfer greater might play out.

Necessary Assist Degree to Monitor

Throughout pullbacks, GameStop buyers will doubtless be eyeing the $25 degree. This value level on the chart finds a confluence of help from the upward sloping 200-day moving average, this month’s low and the inventory’s September countertrend peak.

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As of the date this text was written, the creator doesn’t personal any of the above securities.