GME closes within previous day's range
GameStop Corporation (GME) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
GME ended the month 6.9% higher at 4.34 after losing $0.04 (-0.91%) today, notably underperforming the S&P 500 (1.54%). Today's close at 4.34 marks the lowest recorded closing price since June 5th. Trading up to $0.13 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (GME as at Jun 30, 2020):
Tuesday's trading range has been $0.31 (7.16%), that's slightly below the last trading month's daily average range of $0.40. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GME. Prices continued to consolidate within a tight trading range between 4.20 and 4.52 where it has been caught now for the last three trading days.
Five candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern, one bearish pattern, the Gravestone Doji and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man. The last time a Rickshaw-Man showed up on January 3, 2019, GME gained 17.50% on the following trading day.
After trading down to 4.20 earlier during the day, the share bounced off the key technical support level at 4.26 (S1). The failure to close below the support could increase that levels significance as support going forward. GameStop closed back below the 100-day moving average at 4.37. The stock was sold again around 4.51 after having seen highs at 4.52, 4.50 and 4.54 in the last three trading sessions. Obviously there is something going on at that level.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might accelerate should prices move above the close-by swing high at 4.52 where further buy stops could get triggered. Further selling might move prices lower should the market test May's nearby low at 3.96.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Southern Doji" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for GameStop. Out of 48 times, GME closed lower 54.17% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 56.25% with an average market move of -1.31%.