GME breaks below Thursday's low
GameStop Corporation (GME) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GME finished the week 5.51% higher at 4.02 after losing $0.09 (-2.19%) today on low volume, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.08 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 4.07, the share confirmed its breakout through the prior session low after trading up to $0.05 below it intraday.
Daily Candlestick Chart (GME as at Feb 14, 2020):
Friday's trading range has been $0.17 (4.14%), that's below the last trading month's daily average range of $0.23. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GME.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on February 7th, GME actually gained 3.41% on the following trading day.
Unable to break through the key technical resistance level at 4.16 (R1), the market closed below it after spiking up to 4.19 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
Though GameStop is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might speed up should prices move below the close-by swing low at 3.74 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for GameStop. Out of 453 times, GME closed higher 51.66% 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 three trading days, showing a win rate of 54.53% with an average market move of 0.19%.