PZZA dominated by bears dragging the market lower throughout the day
Papa John's International Inc. (PZZA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PZZA finished the week -5.13% lower at 77.70 after losing $0.95 (-1.21%) today on low volume, significantly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 77.81, Papa John's confirmed its breakout through the prior session low after trading up to $0.64 below it intraday.
Daily Candlestick Chart (PZZA as at May 22, 2020):
Friday's trading range has been $1.67 (2.12%), that's far below the last trading month's daily average range of $3.25. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for PZZA.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
After trading as low as 77.17 during the day, the share found support at the 20-day moving average at 77.25. The last time this happened on February 18th, PZZA gained 1.37% on the following trading day.
Although the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 80.98 where further buy stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Papa John's. Out of 301 times, PZZA closed higher 56.48% 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 59.14% with an average market move of 0.88%.