GME finds buyers again around 3.99
GameStop Corporation (GME) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
GME finished the month -7.6% lower at 4.01 after losing $0.09 (-2.2%) today, strongly underperforming the S&P 500 (0.77%). Trading $0.10 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Tuesday, GME actually gained 3.05% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GME as at Jul 31, 2020):
Friday's trading range has been $0.17 (4.19%), that's below the last trading month's daily average range of $0.21. 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 3.92 and 4.23 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
After having been unable to move lower than 3.97 in the previous session, the share found buyers again around the same price level today at 3.99.
Although GameStop is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the nearby swing high at 4.23 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 3.77 where further sell stops could get activated. As prices are trading close to July's low at 3.77, downside momentum might speed up should the stock mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for GameStop. Out of 535 times, GME closed higher 53.08% 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 eight trading days, showing a win rate of 51.40% with an average market move of 0.10%.