"GIGM certainly got overbought on that rally, and it put in a Bearish Engulfing pattern on December 18. The 20/50DMA's also are inverted, so the stock is "ahead of itself," but on a selloff, it's got some support below it, i.e, the moving averages and the top of the Bullish Wolfe Wave."
December 21 Chart:
GIGM moved sideways-to-down, with identical lows at 5.25, which gave the 20/50 DMAs a chance to make a Bullish Cross. The pattern in purple is a Descending Triangle, which more often than not, is considered to be a bearish pattern. A breakout near the apex of a triangle also is considered to be bearish, with the expectation that it will resolve to the downside. Two examples of how there is no "ALWAYS" in the stock market, eh?
GIGM was anything but bearish. It rallied out of the Descending Triangle, and three targets got MADE yesterday: 6.69, 6.82 and 7.00. At yesterday's high of 7.10, GIGM was up 169% off its November 21 low. "Take at least 'some' profits when targets get MADE."
The Bullish Wolfe Wave target is way-y up there. Those target lines usually look very unrealistic, but it will be fun to watch it, to see if it gets MADE.
3 comments:
Concerning your post on x-trends about borrowing GS com, I wouldn't be surprised if the float has been locked up. The large hedge players use their influence to garner the shares leaving the smaller players without stock to lend. I have another theory which is that the GS management having just survived a near death experience due to the short sellers has locked up the shares through jawboning and other means thus making it difficult to short.
Mark,
There's something funny going on, that's for sure. Your explanation makes sense. I can't figure out why I couldn't short AAPL or the QLD, though. Thanks!
I've been giving some thought to the borrow problem. I think that it may be due to the newest rules regarding short sales. Brokers must not only locate shares(old rules) but must actually have them available(i.e. secured for borrow). This makes it a lot of work for low return(short rates at zero) when dealing with small accts. These rules are now being enforced as opposed to being ignored a few months ago. The effect is to discourage short selling which is one of the intents of rules
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