• Meme stocks are lost momentum despite a better market mood.
• GME stock ends Thursday in the red as optimism faded. 
• Gamestop stock split is due on Friday, July 22.

UPDATE: GME finished the day in the red at $153.47 per share, down 3.19%. Market players remained cautious amid persistent inflationary pressures and signs of global economic slowdown, although US indexes managed to post modest gains. The Dow Jones Industrial Average added 162 points, while the Nasdaq Composite surged by 1.36%. The S&P 500 managed to add 33 points or 0.84%. Better than expected earnings results from big names, TESLA included, helped Wall Street with tech stocks fueling equities’ rally. Further support came from easing government bond yields, as the yield on the 10-year Treasury note settled at 2.89%, far from its intraday peak of 3.08%.

Previous update: GameStop stock is retracing somewhat on Thursday as the market has grown more gloomy. GME shares are down 3.1% in the first hour at $153.79 after advancing more than 5% on Wednesday. This is all in the cards after the European Central Bank raised interest rates by half a percentage point, which was twice the expected hike. This has led the US market to now wonder if further unexpected hikes await them in the US in the back half of the year. GME has also advanced for four straight sessions, so it is not unusual to see a stock like that fall to traders taking profits off the table.

Meme stocks are back! The somewhat insultingly titled “dash for trash” has picked up speed this week as equity markets have begun to rally and what remains of the retail army rouses itself for another tilt at financial freedom. Meme stocks in particular moved higher as risk signals flashed green. Bitcoin put in a strong session to move up to near $24,000 before Elon Musk dumped on it in Tesla’s earnings call. It turns out Tesla (TSLA) sold most of its Bitcoin holdings to generate some cash flow last quarter. Elon Musk has been one of the most vocal proponents of crypto, so this was not well-received by crypto markets. However, the overall theme of recovery across global equities should keep the riskier side elevated for at least the remainder of the week and into next week.

Also read: Tesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries

Gamestop stock split: 20-for-1 coming on Friday

Also of help for GME stock is the impending stock split this coming Friday, July 22. Gamestop is doing a 20-for-1 stock split. Stock spits have a psychologically positive impact on immediate stock price performance as retail traders cannot avoid the sale bias in our comparison brain. We just love a discount even if it is the mere appearance of one. All other things being equal, a stock spilt should add to the short-term bullish case for GME. Other developments have also helped the stock. Reportedly, the new NFT marketplace is performing well with reports it is outperforming Coinbase (COIN) in terms of volume. Data from Coindesk shows GameStop’s NFT marketplace almost doubling that of Coinbase in the past ten days. 

GameStop stock forecast: Trying to break out

While AMC remains some way short of its 200-day moving average, GME stock has retaken the long-term level and consolidated its position above it this week. That remains key support at $142, but above there at $150 we get a more important level. This is a range breakout, and holding above there keeps GME bullish in the short term with a target of $199.41, which is the March high and the 2022 yearly high. Breaking below $150 makes it time to exit longs in our view. Risk barometers are key to riding trends in meme stocks. Watch for Bitcoin and other sentiment indicators. If risk appetites turn, the move lower will be fast and furious.

GME chart, daily