GME pushes through Thursday's high
GameStop Corporation (GME) Technical Analysis Report for Jan 17, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, GME ended the week -12.52% lower at 4.75 after gaining $0.13 (2.81%) today, notably outperforming the S&P 500 (0.39%) ahead of tomorrow's Martin Luther King Jr. Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 4.71, the market confirmed its breakout through the previous session high after trading up to $0.04 above it intraday.
Daily Candlestick Chart (GME as at Jan 17, 2020):
Friday's trading range has been $0.24 (5.24%), that's below the last trading month's daily average range of $0.34. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GME.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Regardless of a weak opening GameStop managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on December 16, 2019, GME gained 10.18% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
After trading down to 4.51 earlier during the day, the share bounced off the key technical support level at 4.53 (S1). The failure to close below the support could increase that levels significance as support going forward. The stock was bought again around 4.51 after having seen lows at 4.52, 4.55 and 4.53 in the last three trading sessions. Obviously there is something going on at that level.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 5.55.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the 16 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous three Lows" stand out. Its common bullish interpretation has been confirmed for GameStop. Out of 16 times, GME closed higher 56.25% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 68.75% with an average market move of 2.09%.