SHAK breaks below 100-day moving average for the first time since July 14th
Shake Shack Inc. Class A (SHAK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SHAK ended the month -8.36% lower at 48.55 after tanking $6.67 (-12.08%) today on high volume, significantly underperforming the S&P 500 (0.77%) following Thursday's earnings report. This is the biggest single-day loss in over four months. The bears were in full control today, moving the market lower throughout the whole session.
Daily Candlestick Chart (SHAK as at Jul 31, 2020):
SHAK reported earnings of $-0.45 per share after Thursday's market close. With analysts having expected an EPS of $-0.4, Shake Shack Inc. Class A missed market expectations by -12.5%. The company's last earnings report was released on May 4, 2020, when Shake Shack Inc. Class A reported earnings of $0.02 per share.
Friday's trading range has been $6.07 (11.54%), that's far above the last trading month's daily average range of $2.36. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SHAK.
One bearish candlestick pattern matches today's price action, the Black Candle.
The share closed below the 100-day moving average at 48.83 for the first time since July 14th. When this moving average was crossed below the last time on July 7th, SHAK lost -1.76% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Trading close to May's low at 45.51 we might see further downside momentum if potential sell stops at the level get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for Shake Shack. Out of 149 times, SHAK closed higher 56.38% 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 54.36% with an average market move of 1.01%.