Bellafiore: GameStop A Top 5 Name Of The Day

Mike Bellafiore was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. 

SMB Capital Co-Founder Mike Bellafiore said on Benzinga's #PreMarket Prep that GameStop Corp. GME was one of the "top five names of the day" following its earnings report.

The company not only beat expectations, but also reported better-than-expected same-store sales.

However, Bellafiore said that traders looking to trade GameStop would have to ask themselves the following: "What's the risk/reward with it one point away from an important resistance level?" Bellafiore said that $44.80 could constrain prices.

Earlier in the interview, Bellafiore identified a pattern that might result in a long trade. He said, with regards to Ulta Salon, Cosmetics & Fragrance, Inc. ULTA that he may look to initiate a trade when a stock gaps higher and holds that gap during the first 45 minutes of trading.

At present, Ulta was unable to hold its gap, but GameStop has, trading nearly 7.4 percent higher at the moment.

Into the future, Bellafiore said that he expects Wall Street firms to pile onto upgrades and price target increases following this report. He pointed to an Oppenheimer research note that said momentum in the name is building.

Year to date, GameStop has gained 30.6 percent, though the name is still 10 percent below where it started 2014. Looking at the yearly chart, the price has fluctuated widely between $46.59 and $31.69.