I think at one point it was up 69, maybe a little bit more that’s, just the title that i saw in an article i read, but i want to explain how on earth a company that loses money can see such a dramatic increase in their stock price, Because there is a very good explanation for it and it’s honestly, a pretty entertaining story now, on top of just being entertaining there’s, also a more important lesson behind this, because these are the types of moves that you need to be extremely careful of to make sure That you’re not on the wrong side of them, but you can also make a ton of money off them if you’re on the right side of them, and because of that, i think, it’s really important to talk about so i’m. Making this video for you guys who have no idea what a short squeeze is or who don’t really understand what happened with this play in general. But you do know what a short squeeze is, because uh it’s, just it’s the biggest meme man and it’s just it goes to show how crazy the stock market still is. This year we have some incredible volatility. I mean this thing was trading like a penny stock. Today i mean the moves that we saw on this thing were absolutely wild and i’m just excited to be able to share this with you guys so let’s dive into my computer let’s talk about why it went so crazy and uh how you can take advantage of Plays like these for yourself because there’s a ton of volatility and we want to get that bread baby all right, guys so i’m.
Here at my computer – and this is the yearly chart for gamestop. So you can see, i mean it’s just kind of been fading down over the last year and then it found a bottom here around. You know just under three dollars, which was very, very low and since then here’s what it’s been doing started, squeezing its way on up boom boom boom boom boom and then recently, in this last week, it exploded above 20 went all the way up to 40 consolidated In that area, and then today went on a crazy run from this 43 dollar area, all the way up as high as 70 70 hold on. Let me do five minute: candle that’ll be easier, all the way up as high as 76.76, which is such a crazy move, and the reason that something like this happens again is because of a short squeeze and the reason that people are shorting. This stock is because it loses money, and fundamentally it doesn’t make sense to be longing this stock or buying this stock, because it’s a company that really is not looking like it’s performing too well, and i know that there are some whisperings that they might be getting Their ecommerce side of the brand uh revamped, which could potentially help them to get back in place with the marketplace and uh. You know get more in the times. If that makes sense, so potentially they could do a brand revitalization and uh not be so retail oriented, because that just doesn’t work super real well right now, especially given the pandemic situation.
You know not, as many people are shopping in stores like gamestop, in retail stores and because of that it’s a little bit harder for companies like this to succeed. But if they can, you know, focus on their e commerce side. Potentially they can turn the company around. But for now the company is still losing money, and this is just such a crazy move. So if we go to this article yeah, you can see here, it was actually halted today, that’s one more thing i want to talk about, so you can see it was halted today after shares surged around 69 percent, and for those of you who don’t know what A halt is or why it happens. A volatility halt is just one of the many types of halts, but a volatility haul happens when a stock goes up or down too much within a certain period. And if i go here again, this is the one minute candle uh. You can see the time frame. So this is 12 ‘, 12, 40, 12, 41, 12, 42 and then it reopens at 12 47. So the next candle is five minutes after that. So, typically, when stocks halt up to the upside uh, you’re gon na see a gap up typically and then a lot of times, it’ll gap up and then immediately tank back down and halt going down and that’s. Actually what happened in this case and uh? You can see reopened here, tanked, all the way down, halted, going down and it’s just a set amount.
I don’t personally have access to this, but some people have access on their level twos to these specific halt levels. So you can know like if the stock is here, you can know. Oh if this touches 63 dollars, it’s gon na halt to the downside and that’ll be another five minute halt and sometimes it’s five minutes, sometimes it’s ten minutes, but typically it is in that area. Five is what’s most common and then after five minutes the stock reopens begins trading again it bounced all the way back up here, halted again to the upside and then reopened uh. I believe it it opened down here, but then it immediately bounced and then uh just ended up fading off so that’s what happens? Uh when you get these volatility, halts again, it’s very normal. You can see exactly when it’s going to happen when it prints a ton. A ton, a ton of uh of stuff on the time and sales there’s, a ton of, i guess, trades printed and it’s all at the same price. It’S all green it’s, all red, something like that and then it just it halts. And then it stops trading whenever the last one is typically five minutes after that, so you could see six 16 1801. It would open 16, 2301, so that’s how that works. Um, but yeah in this case, like the story behind this is literally so crazy, guys it’s. So crazy! So if i go to this article, you can see that gamestop rocketed above its 2007 peak on friday, in a move that one short selling expert thinks could possibly kill investor interest in shorting the video game retailer so to explain the concept of a short squeeze extremely Quickly in case you guys already know what it is short selling is where you sell before you buy, but the goal is the same thing you want to buy lower than you sell.
So if you’re, if you’re trading, normally you buy low and sell high if you’re short selling, the goal is to sell high and then buy back lower later. But when the trade goes against you, you can lose an infinite amount of money because stocks can go infinitely. High, they can only go down to zero, but they can go infinitely high and once you get to a certain point, typically, people have risk levels that they are are willing to risk and a lot of people on this stock probably were using these risk levels. If you go back and look at the max chart, the highest level this stock has ever been is right in this 63.77 that was the highest previous price of the stock. So a lot of people today were probably using that as the risk on a short you know they might have gotten in uh. You know call it here right here, 63 77., so they might have gotten in you know here: 50 50. They might be thinking there’s. No way it goes higher than that i’m, risking that or they might have gotten in at 58 dollars. It’S 60 thinking there’s no way it breaks all time highs, but when it does they’re limiting their losses by buying back in and when they buy back in to cover their uh their short position, it just pushes the price even higher and that’s. Why? We got this crazy rip here. If i go analyze this a little bit, you can see the first time it ripped through it, looked like it rejected that break, which is a short trap, because shorts are thinking.
Oh yeah i’m getting in here it’s going to reject it at the all time highs, but then it ripped right back up through that and then kept on spiking and halted to the upside, so it’s, pretty crazy, um there’s. So many examples of stocks like this. Let me just walk you through a couple. Acy is one of my favorite ones. To talk about this one went absolutely insane. It went from three dollars one day and the next day was at 38 rhe. I traded this one uh. It went from 150 all the way up to 1577.. I bought this at 330 sold half of 12 half at six on the way back down. Um g l s y, i believe, or g g l s – i yeah. So this one. This is probably the most insane one. This one went from five dollars all the way up to 158 dollars in one day. These are the types of moves that you can get when you have a short squeeze and uh it’s, just pretty cool to see. So now let me go back and explain a little bit more, so basically uh. This is a big meme from reddit’s wall street bets and uh it’s, because there’s it’s, like a community of stock traders who make ridiculous trades and occasionally they will pay off absolutely enormously and most of the time they completely flop and uh it’s just it’s. They just lose money, but typically speaking wall street bets uh is like just a funny meme community that, if you’re into finance you can enjoy, but in this case they took offense to the fact that uh this one it’s so funny.
This one citron research guy andrew left was a big short seller of this stock, because it i mean from a long standpoint if you want to buy this stock, it just doesn’t make sense fundamentally because it’s it’s losing money, and he made a youtube video talking about The reasons he believes the stock would soon fall back to 20, and the people of wall street bets took that as a challenge to push this thing as high as possible, which just turned it into a meme man. So because of that it uh it just went absolutely exponential, and you can see here the shorts, including him uh. They lost an estimated 1.22 billion dollars in the 40 intraday jump. Let me repeat that again: shorts lost 1.22 billion dollars on this stock. Today, 1.22 billion dollars – that is absolutely nuts and the amount of market cap that was added to this today – is ridiculous, it’s, absolutely ridiculous! I think they added you know well over a billion dollars to the market cap of gamestop today, which is just crazy, because is it worth it uh? No. Is this going to fall down eventually uh yeah, but do we know when that is no? We don’t because here’s the thing this actually held up the gains surprisingly well from today. Typically, when you have a short squeeze like this, once it reaches the top, it just absolutely cracks and falls back down. There are some bounces. You know where shorts are covering because again when they cover, they might have shorted here and they cover here, but when they cover they have to buy back in, which makes these little bounces and momentum sellers hop on.
So you know they pop up a little bit, but in this case you know it closed up not too far away from the highs man, i mean it didn’t close down here in the 50s or the 40s. It closed up in the 60s mid 60s. So i could honestly see this thing continuing to squeeze, but what you want to do is you want to make sure that you get in on these early? Because if you try to chase these moves, it’s disgusting and you’re going to end up getting absolutely screwed over a you can buy in and hold and hope. And if you buy in at this 70 price and hold and hope you will lose money or you can buy in at this price and uh, you can cut when it goes against you and you also lose money because there’s some massive rips i mean this is A one minute candle and in one minute it went from 70 to 88 all the way down to 61.. So i mean that was over ten dollars in one minute. So if you buy in here and you don’t, have any risk you’re gon na lose money or if you do have a risk, you’re, probably gon na get stopped out. Which is why you have to recognize these things early and uh. No one to get in and i didn’t get in this one. I really didn’t, but there’s. Nice plays there’s nice opportunities for entries.
If you look here, you know you can buy these breakouts before it gets up too too high and then be willing be ready to cut. If it goes against you, because you can buy these breakouts and uh that worked pretty well all day long uh. But once you get too overextended at that point, it doesn’t make sense anymore. So if you can get in early before these massive run, ups happen, that’s, typically a pretty good entry, and this is one that i don’t normally like to dip by uh, just because it’s just it, it gets scary man. It was very scary up in there trying to trade in that area. Here there are a ton of red candles. You can see. I mean there’s kind of a lot which made this an okay dip buy, but in general, not the type of stock that i would personally choose to be, throwing my money into um and then there’s, just some great memes that i absolutely had to share here. This dude made it uh. If you have not seen the wolf of wall street, i definitely recommend it. It’S it’s very important if you’re into stocks but uh. This is basically copying a scene from a movie and applying it to gamestop. So this is when he is calling people and convincing them to buy disgusting stocks because it’s his job and he he buys them before them and it’s a pump and dump and once they buy and spike the price up.
He sells makes a ton of money and then the price tanks back down so that’s, leonardo dicaprio. He says the name of the company gamestop is a cutting edge. Video game store out of the grapevine texas awaiting imminent patent approval on the next generation of virtual reality. Omnidirectional gaming devices that have both huge military and civilian applications now so you know he does his best to sell these stocks and make them seem like they are the greatest thing in the world so that those schmucks can hop on the train and he can make His money off of their losses and uh, i feel like that’s what might happen with gamestop if there’s too many people who buy in unsuspecting and unaware of what is going to happen because short squeezes always result in a big crash it’s just a matter of time. When they’re going to be so, could this keep squeezing yeah? Could this go over 100 yeah? Could it fall back down to 30 yeah? So i would personally not touch this one at this point, uh just because there’s other better stocks that i think are more worth trading. So if you want to trade stocks, trade, tsmp, trade miti, these ones have a lot more upside and a lot less downside. In my opinion, i think the risto reward is better on plays like this um but yeah if you’re, if you’re looking for, plays like this definitely check out the discord in the description below, because you know, stocks are always popping off and you don’t want to miss Those best opportunities and uh yeah that’s pretty much it for this video.
I appreciate all of you who made it to the end we’re only 12 minutes in so maybe it’s, eight percent of people today, you’re in the eight percent today and uh yeah. I appreciate you guys, thank you.