GME (Long)...

Gamestop is the leading video game retailer in America, selling new and used hardware and software. It has over 6,000 stores worldwide. GME does not pay a dividend. GME is optionable with decent volume and open interest along with tight strikes and bid/ask spreads, making it an ideal candidate for options. GME doesn't report earnings again until probably mid to late February.

GME scores 100% on the Joel Greenblatt screen, 93% on the Peter Lynch screen, 90% on the Kenneth Fisher screen, and 75% on the James O'Shaughnessey screen.

Technically, this stock looks like death warmed over. Note the vicious, high-volume gap-down created last week. However, it held the $20 level, which acted as supported this summer. GME peaked over $60 just two years ago, and bottomed out around $18 back in late 2008, so if $20 fails to hold, I'd look for that to be the next downside level.

GME's going to be a bit of an experimental pick for me. I plan to actively trade this name using a series of monthly call spreads. January options are basically done, but not quite. Tomorrow, I'm going to buy some February calls in GME, probably the $19 strike, and if I can, I'll sell the January $21 calls against those, just to try to pick up a quick couple bucks here on expiration week. If I can't do that, I'll just sell February $21 calls (probably some February $22 calls also because GME may report before February expiration). I believe GME will be rangebound for a while between $20 and $21.

Position: none

Disclaimer: This is not a recommendation and is presented for informational purposes only.