GameStop stock surges despite mixed quarterly results

GameStop (GME.US) stock rose over 6.0% on Friday despite the fact that the video game retailer posted an unexpected quarterly loss of $1.86 per share, which came well above analysts’ estimates of 0.84 cents. Over the same period last year the company recorded profit of $1.34 per share. On the other hand revenue rose 6.2% to $2.254 billion and topped estimates of $2.125 billion. 

• CEO Matt Furlong said the omicron variant and supply chain issues had a significant negative impact on the company's performance in Q4. 
• Company had a negative free cash flow of $131.6 million in Q4, compared to a positive flow of $137.4 million over the same period last year. 
• GameStop is planning to launch a marketplace for NFTs by the end of the second quarter and may also unveil new pacts with crypto currency groups
• Company continues its e-commerce pivot and claims it’s making progress in other areas, too, such as launching a redesigned app, working closer with PC gaming brands and attracting new users to its rewards program.

GameStop (GME.US) stock has been moving in a downward trend in recent months, however it seems that buyers managed to halt declines around $78.15 which coincides with lower limit of the wedge formation. Today stock erased pre-market losses and if current sentiment prevails upward move may accelerate towards major resistance zone around $106.30, which is marked with upper limit of the 1:1 structure, 78.6% Fibonacci retracement of the last downward wave and upper boundary of the wedge formation. Source: xStation5