PZZA slides to lowest close since July 7th
Papa John's International Inc. (PZZA) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, PZZA finished Wednesday at 84.57 losing $1.58 (-1.83%), significantly underperforming the S&P 500 (-0.46%). Today's close at 84.57 marks the lowest recorded closing price since July 7th. Closing below Tuesday's low at 85.23, the market confirmed its breakout through the previous session low after trading up to $2.10 below it intraday.
Daily Candlestick Chart (PZZA as at Sep 16, 2020):
Wednesday's trading range has been $3.67 (4.26%), that's slightly below the last trading month's daily average range of $3.77. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for PZZA.
After trading down to 83.13 earlier during the day, Papa John's bounced off the key technical support level at 84.28 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on September 11th, PZZA actually lost -3.33% on the following trading day.
Though the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Trading close to July's low at 80.22 we could see further downside momentum if potential sell stops at the level get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Papa John's. Out of 407 times, PZZA closed higher 58.72% 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 59.21% with an average market move of 0.87%.