PLAY unable to break through key resistance level
Dave & Buster's Entertainment Inc. (PLAY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, PLAY ended the week 23.49% higher at 12.04 after gaining $0.51 (4.42%) today, notably outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 12.04 marks the highest recorded closing price since May 1st. Closing above Thursday's high at 11.84, the share confirmed its breakout through the prior session high after trading up to $0.35 above it intraday.
Daily Candlestick Chart (PLAY as at May 22, 2020):
Friday's trading range has been $0.78 (6.7%), that's below the last trading month's daily average range of $1.06. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PLAY.
The market managed to close above the 50-day moving average at 11.62 for the first time since February 24th. Unable to break through the key technical resistance level at 12.16 (R1), the stock closed below it after spiking up to 12.19 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on May 12th, PLAY lost -8.41% on the following trading day.
While Dave & Buster's is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
As prices are trading close to May's high at 14.21, upside momentum might speed up should PLAY mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for Dave & Buster's. Out of 72 times, PLAY closed higher 62.50% 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 50.00% with an average market move of 1.50%.