<img src=”https://storage.googleapis.com/prod-zenger-upload/image/20230725/feat_4f432f47-4b38-4fbe-8be2-8f3b7f32cd7e.jpg” alt=” GameStop Corporation was popping higher Monday, lagging AMC Entertainment Holdings, Inc, which was surging over 35% following news a court rejected the company’s proposed settlement offering with sharehZenger News. LINDSEY NICHOLSON/GETTY IMAGES  “>

GameStop Corporation (NYSE: GME) was popping higher Monday, lagging AMC Entertainment Holdings, Inc, which was surging over 35% following news a court rejected the company’s proposed settlement offering with sharehZenger News.

The video game retailer is being held down within a falling channel pattern on the daily chart and is also working to print an inside bar formation.

The falling channel pattern is bearish for the short term, but can be bullish down the road.

For bearish traders, the “trend is your friend” (until it’s not) and the stock is likely to continue downward. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.

GameStop Lags AMC Entertainment: Here’s Why A Big Reversal Could Be On The Horizon 

Bullish traders will want to watch for a break up from the upper descending trendline, on high volume, for an entry. When a stock breaks up from a descending channel, it’s a powerful reversal signal and indicates a rally is likely in the cards.

The GameStop Chart: GameStop started trading within a descending channel pattern on June 14 and the stock has been making a consistent series of lower highs and lower lows within the formation. The most recent lower high was formed on July 19 at $23.58 and the most recent confirmed lower low was printed at the $22.68 mark the day prior.

Produced in association with Benzinga

Edited by Saba Fatima and Maham Javaid