Dave & Buster's Entertainment Inc. (PLAY) is likely to sink still lower in the months ahead. We looked at the charts of PLAY on June 10 ahead of earnings. It never moved above $54 and the the Point and Figure chart had a downside price target of $46. Earnings disappointed and prices sank quickly to $40. How do the charts look now?
In the updated daily bar chart of PLAY, below, shows a big downside price gap with heavy volume. Prices are trying to stabilize but the daily On-Balance-Volume (OBV) line is still weak suggesting that sellers of PLAY are still more aggressive.
The 12-day price momentum indicator is making lower lows so we know that the rate of the decline has not slowed.
In the weekly bar chart of PLAY, below, we can see the price action going back to late 2016. The price action of the past 2 1/2-years looks like a large top formation with a neckline around $38 or so. A weekly close below that level could open the way to a bigger decline. PLAY is below the declining 40-week moving average line.
The weekly OBV line shows a recent turn lower and the MACD oscillator is below the zero line in sell territory.
In this weekly close only Point and Figure chart, below, a longer-term bearish price target of around $20 can be seen.
Bottom-line strategy: A few weeks ago PLAY showed some promise but now the bullish signals are gone. Play carefully as PLAY could head a lot lower from here.