GME breaks below key technical support level
GameStop Corporation (GME) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GME ended the week -0.95% lower at 4.18 after losing $0.26 (-5.86%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 4.40, the market confirmed its breakout through the prior session low after trading up to $0.27 below it intraday.
Daily Candlestick Chart (GME as at May 22, 2020):
Friday's trading range has been $0.36 (8.07%), that's slightly below the last trading month's daily average range of $0.46. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GME.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Last Engulfing Bottom Pattern which are both known as bullish patterns and one bearish pattern, the Black Candle.
Prices broke below the key technical support level at 4.32 (now R1), which is likely to act as resistance going forward. The last time this happened on May 12th, GME lost -7.27% on the following trading day.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for GameStop. Out of 106 times, GME closed higher 57.55% 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 54.72% with an average market move of 1.00%.