PZZA misses to close above 200-day moving average
Papa John's International Inc. (PZZA) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
PZZA finished Thursday at 52.33 losing $0.96 (-1.8%), notably underperforming the S&P 500 (6.24%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (PZZA as at Mar 26, 2020):
Thursday's trading range has been $4.45 (8.26%), that's slightly below the last trading month's daily average range of $5.33. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for PZZA. Prices continued to consolidate within a tight trading range between 48.04 and 57.01 where it has been caught now for the whole last trading week.
In spite of a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on February 25th, PZZA lost -8.67% on the following trading day.
Prices are trading close to the key technical support level at 48.04 (S1). After spiking up to 55.23 during the day, the market found resistance at the 200-day moving average at 54.95. After having been unable to move above 54.50 in the prior session, Papa John's ran into sellers again around the same price level today, missing to move higher than 55.23.
Though the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 57.01 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 48.04 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Papa John's. Out of 210 times, PZZA closed higher 55.24% 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 58.57% with an average market move of 1.16%.