Esports Entertainment (GMBL) Breaks out – But don’t move in so fast!

What Happened to GMBL Today?

There hasn’t been any news posted on Esports Entertainment Group – GMBL today as shares climbed almost 75% to $13.50 from yesterday’s close of $7.72. Before the closing bell, shares pulled back slightly to close at $11.98, posting a 55% gain on the day.

What Does the Chart Pattern Tell Me?

There are some MAJOR warning signs in GMBL today. What might first look like a double bottom pattern with a breakout on massive volume today, could have much more to it. 3 Major warnings signs exist in this pattern:

  1. The middle peak of the double bottom is in the bottom half region of the W! The best double bottom patterns will have the middle point of the W peak in the top half of the formation.
  1. The second bottom does not dip as low at the first! The best scenarios will give the weak investors a shakeout on the second leg before the next movement up
  1. The uptrend on the right side of the W swerves off to the right. The strongest patterns will have a steady formation on the right side of the W before the breakout. The diagonal seen show that investors were recently hesitant to pick up more before this breakout.

Conclusion

With no news in the last few days about the stock, this breakout is questionable. There are no new earnings or reason to believe the company suddenly is worth more value. With 3 checks failing in the pattern, be cautious with this stock! Or should I say.. don’t GAMBLE on GMBL!

As always, Stock Tavern is not suggesting you buy or sell this stock, and this analysis should not be taken as financial advice. Always do your research and make your own decisions, we all have different risk profiles and therefore no trade is right for everyone.

Disclosure: I have no current position in GMBL

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