GameStop Corp. (NYSE:GME) was a talk of the WallStreetBets at the start of 2021. The stock rose on a retail trading frenzy resulting in squeezes of short-sellers in Wall Street.
However, since hitting a high of around $483, the stock has failed to replicate the gains, falling back to below $80 this year. Yet, in the fourth quarter of 2021, GameStop announced a loss of $147.5 million, compared to a net income of $80.5 million in the previous year.
The Achilles heel of the gaming retailer has been the falling physical market for video games.
Just like GameStop, AMC Entertainment Holdings, Inc. (NYSE:AMC) has been driven by a retail frenzy. The movie theater retailer got a hit during the Covid-19 pandemic as people avoided visiting physical spaces often.
The company is currently recovering, as underlined by a revenue of above $1 billion in the fourth quarter of 2021. The revenue compares to just $162.5 million in the prior year.
Given the similarities and dissimilarities, which is better between GameStop and AMC?
GME approaches a resistance zone. Will it go higher?
Source – TradingView
On the monthly chart, GME is approaching a resistance after a day of gains. GameStop added more than 12% on Wednesday, after another 30% the previous day. This was after billionaire Ryan Cohen bought 100,000 shares in the gaming retailer.
AMC approaching a resistance after improved sentiment
Source – TradingView
Just like sister meme stocks, AMC added 15% on the improved sentiment. As both stocks approach a resistance zone, investors will be keen on whether the levels will be breached. But should you buy it?
Final verdict
Although both GME and AMC trade at a massive discount from their previous highs, we find their price movements tied to momentums more than fundamentals. In our view, AMC seems to be conquering its challenges better from the improved earnings in the post-pandemic era. This makes the stock a better hold compared to GameStop.
Still, both stocks are hitting a resistance, and a downside is likely. We recommend traders ride momentums on either stock rather than consider buy and hold.
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