GameStop (GME) Stock: Meme Magic Returns With 7% Surge – What Traders Are Watching

TLDR

• GameStop stock surged 7% to $22.58 on Monday, marking its biggest one-day gain since October
• Aggressive bullish options activity drove the rally, with the put/call ratio dropping to 0.12 compared to a six-month average of 0.24
• Social media speculation intensified following Michael Burry’s delayed Substack post and viral TikTok content
• The stock now trades near its 200-day moving average of $24.40, with key resistance at $22.50
• GameStop’s rally diverged from the broader specialty retail sector, with Best Buy down 0.61% on the same day

GameStop stock jumped more than 7% on Monday in a rally that caught the attention of traders and meme stock enthusiasts. The video game retailer’s shares climbed to $22.58, posting their largest single-day gain in two months.

GameStop Corp., GME

The surge appears driven by a combination of social media buzz and aggressive options trading. GameStop’s put/call ratio plummeted to 0.12, well below its typical six-month average of 0.24, signaling that traders are making heavily bullish bets.

Michael Burry, the investor famous for predicting the 2008 financial crisis, posted a delayed message on Substack that reignited retail investor interest. A TikTok artist known as “Best Buy Rilie” also generated roughly 50 million views with viral videos related to GameStop.

The stock broke through intraday highs of $22.57, moving closer to its 52-week high of $35.81. It has climbed from a 52-week low of $19.93, representing a notable recovery in recent weeks.

Options Activity Points to Speculative Bets

Two call options contracts attracted heavy trading volume on Monday. The GME20251219C22 call option, expiring December 19, showed a delta of 0.7089 and gamma of 0.3424 with turnover exceeding 735,000 contracts.

A second contract, GME20251226C22.5, expiring December 26, recorded turnover of 533,320 with implied volatility of 45.55%. Both contracts offer high leverage potential if the stock continues to rise.

Technical indicators show the stock trading with an RSI of 59.32, approaching overbought territory but still in neutral range. The MACD reading of 0.0279 suggests bullish momentum continues to build.

Key support sits at $20.96, while resistance levels include the Bollinger Band upper limit at $22.50. The 200-day moving average of $24.40 represents a critical test for the stock’s rally.

Retail Sector Shows Mixed Performance

GameStop’s rally stood in contrast to broader retail sector trends. Best Buy, a major specialty retailer, fell 0.61% on Monday as concerns about holiday sales weighed on the sector.

This divergence highlights GameStop’s unique position as a meme stock rather than a traditional retail play. The company’s price movement appears disconnected from fundamental performance metrics.

GameStop reported a 5% year-over-year revenue decline in its third quarter. Despite weak financial results, the stock’s price action reflects sentiment driven by social media and speculative trading.

Backtesting data from similar rallies since 2022 shows modest success rates. Three-day win rates after 6% intraday surges came in at 43.78%, while 10-day and 30-day win rates hovered around 44%.

The maximum return observed during the backtest period reached just 7.03%. These historical patterns suggest caution for investors chasing momentum.

Traders are now watching whether GameStop can break above the $22.50 Bollinger Band resistance level. The stock sits approximately 8.5% below its 200-day moving average, leaving room for further upside if momentum continues.

Monday’s trading volume and options activity suggest renewed interest from retail traders. The combination of social media catalysts and technical positioning has created conditions similar to previous meme stock rallies.

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