Six Flags Entertainment Corp. (SIX) gapped lower Thursday as traders reacted to the latest earnings report and lower traffic numbers. Let's check out the charts and indicators.
In this daily bar chart of SIX, below, we can see that prices lost ground quickly from February and only made a tiny base in June and July. Prices got above the 50-day moving average line, but the slope remained pointed down. The On-Balance-Volume (OBV) line shot up dramatically in July and suggests the move was on aggressive short covering. The Moving Average Convergence Divergence (MACD) oscillator is back to the zero line but it is likely to reverse direction.
In this weekly Japanese candlestick chart of SIX, below, we see a less than robust picture. The latest price action is not plotted. The slope of the 40-week moving average line is pointed down. The weekly OBV line is struggling. The MACD oscillator is below the zero-line.
In this daily Point and Figure chart of SIX, below, we can see a downside price target in the $14 area.
Bottom line strategy: Avoid the long side of SIX as they don't have your back.
