GameStop (NYSE:GME) short sellers are risking drowning in a new massive rally as the stock sets itself up for bigger gains.
In the past 3 months alone, more than 473k shares have been purchased from insiders with 0 shares sold.
In the past 12 months, more than 762k shares have been purchased with only 3.8k shares being sold.
Ryan Cohen recently purchased GameStop stock worth $10 million, a securities filing showed last week.
Amongst Cohen, Directors Lawrence Cheng and Alain Attal also purchased shares of GameStop in June for a total of 15k shares.
Officer Mark Robinson also acquired nearly 10k shares for the month of June.
When Ryan Cohen purchased shares in 2022, buyers followed creating a big rally.
The big risk here for GameStop short sellers is that the company is now profitable and insiders have begun to buy shares again.
The most logical solution here would be to close their short positions now before drowning in a rally due to big buying pressure.
GameStop short sellers have lost more than $320 million this year as the stock has performed relatively well.
GME stock is up more than +41% this year-to-date with analysts predicting bigger price gains this year.
A New Analysis Projects Big Price Surge in GameStop
If you’re familiar with my work, you’ve seen me publish this analysis on GameStop before, but it’s important to share because it paints the overall sentiment of where GameStop stock may go.
The Elliott Wave Forecast has recognized an Elliott Wave Nest pattern in GameStop’s current trend.
“Most of the time a nest happens before a huge move takes place,” says BarChart.
In simple terms, the Elliott Wave Nest is essentially a break in structure towards the upside, signaling powerful bullish momentum.
Here’s what this looks like in GameStop:
“The chart above shows the reactions higher from the 1.06.2023, 3.16.2023 and 5.02.2023 lows and the series of higher highs and higher lows taking place.
In a nesting structure, one needs to observe the RSI readings.
The second nest should erase divergence against the first peak and the last nest should come with divergence against the previous peak.
From here, the stock should remain above $18.06 otherwise the nesting structure is invalidated.
Once the wave of 3 starts, we expect the stock to rally towards $55 – $80 before entering into a series of 4s and 5s.”
GameStop shares closed at $26.95 on Tuesday, a jump to $55-$80 per share is quite significant.
This analysis was published on Monday, June 12th by Elliot Wave Forecast and shared by BarChart, who claim did not have any position in the security being mentioned.
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