Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
Shares of Planet Fitness (PLNT) fell 15.9% to $50.29, hitting a year low after the company announced a leadership transition. The company has appointed Craig Benson as the interim Chief Executive Officer, after the departure of the current Chief Executive Officer, Chris Rondeau.
After the release of second-quarter earnings results, PLNT stock price gained bearish momentum. In August 2023, the second quarter earnings report was released which induced a negative sentiment in the market and the price shattered the $63 support level.
Recently, PLNT stock price formed support at $58 and regained bullish momentum in order to retest $63 but the move was halted at $62. On the last trading day (15 September), PLNT share price broke the recent support of $58.
If the bears stay in control, there is a possibility that the stock price might melt down toward the next support level of $47. However, $50 is a strong psychological level that may hold the PLNT stock price. On the other hand, if the stock price can form a support at $50, it might retrace and retest $58.
Why Did Planet Fitness Stock Witness a Strong Drop?
Planet Fitness stock fell more than 15% as the company appointed board member Craig Benson as interim Chief Executive Officer. Craig Benson, who is CEO of Soft Draw Investments, succeeds Chris Rondeau, who will continue to serve as a board member. The fitness center company has started its quest for a permanent CEO.
The company also stated that the departure of Chris Rondeau wasn’t the result of any unexpected financial event and will remain in an advisory role to support the transition.
As per the agreement, Rondeau will awarded a prorated 2023 bonus of nearly $800,000 and receive 200% of his base salary of $950,000, which will paid out in the next two years. The separation agreement also includes a confidentiality provision and a non-compete clause.
Will PLNT Stock Continue to Fall?
The stock price has plunged below 20, 50, 100, and 200-day exponential moving averages, indicating bearish momentum. The 20-day EMA has been acting as a resistance to the price.
Chaikin money flow score is in a downward trajectory and currently stands at -0.35, suggesting strong weakness in the market.
The relative strength index has entered into an oversold zone and currently stands at 23.63, indicating chances of short-term pullback. Firstly, PLNT stock price needs to form strong support before making any upward move.
Conclusion
Planet Fitness now expects a revenue increase of 12% for FY23 as compared to the previously expected range of 13-14%. PLNT stock’s market structure and price action is overall bearish and the stock price needs to form strong support.
Technical Levels
Major support: $47 and $37
Major resistance: $62 and $70.30
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Source: https://www.thecoinrepublic.com/2023/09/16/planet-fitness-plnt-stock-strong-meltdown-after-ceo-transition/