FSLR exploded out of this QUADRUPLE nested Symmetrical Triangle on a huge Breakaway Gap that was a "Gap And Go," with almost no give back from the opening price. The difficulty with playing a gap like that is the obvious risk that there might be a sizeable gap fill after the open.
The Ascending Triangle (pattern in green) target of 177.23 got MADE shortly after the open. Given the fact that the chart looked so bullish ahead of earnings, it would seem a "no brainer" to be long, but as I said yesterday, the fundamentals can and do sometimes trump the technicals and it can be hazardous to our wealth to get caught on the wrong side of the release of earnings. We'll see an example of that in a moment.
I didn't think that I'd have a play in FSLR after the Breakaway Gap at the open, but in the afternoon session, I noticed this nested DOUBLE Ascending Triangle and went long at 186.45 coming off White Data Point #4, with a stop just below that. A breakout, which came shortly after I entered, measured to 192.48, above the high of the day.
After the DOUBLE Ascending Triangle breakout, FSLR rallied to 189.68, but the general market was looking very weak. Discretion being the better part of valor, I raised my stop to a trailing stop of a dollar, and was stopped out below 188.68 (a dollar below the local high of 189.68).
Going into April, 2008 earnings a year ago, GOOG looked awful, technically. It had broken down below multiple patterns coming out of 2007 and going into the release of earnings, GOOG had broken below a Rising Channel/Bear Flag, retested that breakdown, and FAILED the retest the day before the release of earnings.
Based on the chart only, and the fact that numerous analysts expected GOOG to miss earings, "You Make The Call." We DON'T make calls, but for grins, my call would have been ALL IN on the downside. LOL.
You know what's coming...
"Shock And Awe" on the UPSIDE. You see what I mean when I say that, "At times, the fundamentals can and do trump the technicals." I view the release of earnings as a "wild card" of sorts, and for that reason, prefer not to have a position going into it.
In the SPX, The Bulls and The Bears continued to do duke it out betwixt and between the Symmetrical Triangle (in white) and the Rising Channel/Bear Flag (in red).
The Bulls rallied it back to the top of The Channel. The Bears shut it down right there and took the SPX back toward the top of the Symmetrical Triangle support where The Bulls stood their ground, although there was another slight violation of the top of the pattern.
It's almost becoming commonplace to see Rising Channels/Bear Flags "morph" (change) into H&S Tops or Descending Triangles, and Bullish Falling Wedges/Bulls Flags "morph" (change) into Bullish Inverse H&S or Ascending Triangles (e.g., the AAPL chart posted yesterday. It was a Bullish Falling Wedge that morphed into a Bullish Ascending Triangle).
The SPX Bears have got the chance of morphing The Channel (pattern in red) into a H&S Top (pattern in yellow) by "giving it up" to The Bulls and allowing them a rally here to form a Right Shoulder, but The Bears must shut it down (preferably below the 882.06 high of The Left Shoulder) then knock out the 867.88 - 868.51 neckline of this putative H&S Top. If they can, that would indicate roughly 20 points of downside and would put roughly SPX 848 IN PLAY.
The MACD is rallying back to its declining signal line, and also rallying back to the broken neckline of the "mini" H&S Top for a possible "Kiss of Death" if the Bears can look sharp here.
Gain on the FSLR trade: $1,200.
2 comments:
I was looking at the SPX 60min chart at the bottom and wondered why the double bottom W was not usable? Is it that pt #1 and #3 are not close enough in price or did it just fail at pt#4 and therefore was of no further concern?
Mark,
Yes, the fact that those lows aren't very close enough makes a Double Bottom a bit of a stretch, but as always, "use what works." If a measured move target off the breakout gets MADE, you can call it whatever you want ;)
If it had broken out to Data Point #4, then come back and found support at the middle of the "W," (Data Point #2) or very close to that, it could be argued that it's a Double Bottom.
But, the fact that price went well below the "W" pivot (the middle of the "W", at Data Point #2) would seem to refute any idea of a Double Bottom, especially since at Data Point #5, the entire pattern looks so much like a Rising Channel.
Just my opinion, of course. It's great that you're thinking about these things. Very good!
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