PLNT enters Death Cross for the first time since January 7th
Planet Fitness Inc. (PLNT) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, PLNT ended Thursday at 52.38 gaining $2.05 (4.07%), strongly underperforming the S&P 500 (6.24%). Trading up to $2.46 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 prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (PLNT as at Mar 26, 2020):
Thursday's trading range has been $3.95 (7.67%), that's below the last trading month's daily average range of $6.28. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for PLNT.
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.
The stock managed to close above the 20-day moving average at 51.69 for the first time since February 24th. Prices are trading close to the key technical resistance level at 54.96 (R1). After having been unable to move above 53.30 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 52.99. The last time this happened on February 21st, PLNT lost -3.75% on the following trading day.
Although Planet Fitness is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish. With its 50-day moving average crossing below its 200-day moving average, PLNT has entered a so-called "Death Cross" for the first time since January 7th. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Buying could speed up should prices move above the nearby swing high at 53.30 where further buy stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Death Cross" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Planet Fitness. Out of 2 times, PLNT closed higher 100.00% of the time on the next trading day after the market condition occurred.