PZZA - Papa Johns Potential Swing setupHi guys! This is a Technical Analysis on PZZA/ Papa Johns Pizza and its current price action showing a potential swing trade set up in my opinion.
Lets jump right in.
Note this is on the WEEKLY Timeframe.
I am currently posting this on Thursday so current candle is not yet confirmed.
Wait till friday's market close. And trading weekly candles it can also help to wait for the next 1 or 2 week candle closes for Confirmation.
BUT i will do MY VERY BEST to keep you updated. (So follow me if your interested)
Okay FIrstly PRICE ACTION:
Current movement is breaking out of this Red Sloping Resistance line from our TOP (December 2021), We need to see if we stay above this, and it act as support in coming weeks.
We are also moving above the GREEN Moving average, the 50 DMA, which we've been below about 5 months or 20 weeks. So it can be probable that we stay above it for atleast couple weeks, at the very least. Since we havent in some time.
This move or MOMENTUM comes from testing and confirming SUPPORT from the convergence support line of the 2 white support lines from previous history dating back, December 2008 and July 2018, respectively.
ALso note, the 2 green curved lines drawn, this indicates double bottom, which could also be adding to this upward move.
My Target is where the RED Horizontal resistance line and BLUE moving average, the 100 DMA CONVERGE. For a return of 14%, before a possible PULLBACK.
Now with PRICE ACTION, i combine some indicators usually momentum indicators to see whether or not certain areas will have enough or continue to have enough momentum to push through.
Firstly we have the RSI -> The most important thing for me is to create a higher high on the RSI above this HORIZONTAL WHITE LINE. If we are above it come end of Friday, i see it as a good sign.
Next we have the MACD.
Notice we have a bullish cross, where blue line is above orange/red line with dark GREEN Histograms growing tall. -> You wanna see this for bullish case.
Also notice how the white sloping line, highlights how the RED histograms have been getting smaller, showing waning bearish momentum.
We are also below the 0 level, if we can get above this with the Bullish cross of the blue/red lines, it can be extremely BULLISH. It could have enough momentum to push passed the RED HORIZONTAL line @ $96.00
So keep an eye on MACD, in next coming weeks.
Next is ADX & DI. Notice the white box, coinciding with December 2021 TOP.
This was BEARISH indicated by RED line on top of Green line.
Now coming to recent action, GREEN line is now crossing over red.
Notice the WHITE horizontal line, if Green line can move above, this will indicate a higher high and a good sign.
Also the white Moving average, can play a factor. If it crosses the green line when the green line is above red line, this can have bullish indication. Notice the previous history and the green circles highlighting the crosses.
Lastly, the idea of BULLISH DIVERGENCE is a possibility.
This is when Price action has lower lows but indicators show higher lows. WHen this happens, price action eventually catches up to match indicators with massive gains to the UPSIDE.
Notice the RED line in RSI, indicating higher lows. But price action showing double bottom or sideway action. This could be a variation of a DIVERGENCE but also could mean the divergence hasnt formed yet, implying a future PRICE DROP creating a lower low.
CONCLUSION:
All in all, many things are happening in PZZA price action, indicating a battle for trend reversal. Weekly charts help show a more macro view of whats to come compared to Daily charts. We have a potential break of a MAJOR resistance line from December 2021 top, a reclaim of the 50 DMA, and a move of atleast %14 happening. We could have a potential double bottom formation with a bounce from converging support lines, in play. Indicators also show probability of momentum still left in the tank for prices to continue Up. On the downside, there is always chance of price moving down, and a potential of a Bullish divergence, though a great sign overall could mean a short term price drop for it to play out.
Anyway i hope this helps. Let me know what you think by COMMENTING! Please, if you like this analysis, do boost and follow for updates/ other charts on all kinds of trade-ables.
DISCLAIMER: I am not a financial advisor. This is not financial advise. This is my opinion and for educational expression. Risk management should always be a majority of your strategy, do practice proper risk management and issue stop losses. Thank you.
