GME - GameStop on Sale?

Well that was quick. GME went on sale today. Hopefully it'll be on sale tomorrow, because I neglected to pick up any shares.

Today's close: $45.76
RSI(2) = 3
RSI(14) = 32

There was a huge volume spike at around 2:30pm as the price quickly rose from 45.30 to 45.75 in a matter of moments. The 50-week moving average for the stock is 45.50. I guess you could say the stock found some support at that price.

Why the (almost) Presidents' Day sale? I found a possible explanation from James Brightman at gamedaily.com:

Video game specialty retailer GameStop has seen its stock take a dip thanks to Microsoft's Xbox 360 supply issue, which could linger for a few months.

Earlier we reported on the supply issue Microsoft has been facing with its Xbox 360. According to Corporate VP Jeff Bell some retailers have been "really upset," and he noted that it may hurt sales as well. The news is apparently already having an effect on leading video game retailer GameStop, whose shares (GME) have dipped nearly three percent to $45.91 (as of press time). The company's shares hit a low of $44.88 during morning trading.

According to UBS analyst Ben Schachter, "supply will remain an issue for at least a few months. This near-term issue creates a buying opportunity in GME in our view."

Although GameStop may be slightly hurt in the near-term, over the long-term UBS remains quite bullish on the retailer. "...GME's growth story remains intact longer-term. We believe the co. will continue to expand margins from debt reduction and mix improvements (higher software sales vs. hardware and more used software vs. new). Moreover, while 360 supply issues may impact industry growth a bit, overall we remain bullish on industry fundamentals. Finally, GME continues to execute, establishing itself as the game retailer of choice," Schacter said.

UBS has upgraded GME to a "Buy" rating (thanks to the opportunity presented by the 360 supply issue) and is maintaining a price target of $64.