POT, XING And PAAS

POT has been a monster off its triple breakout in early May. Coming off the late April low, with the exception of the hesitation at the top of The Rectangle, the rally has been a parabolic 52% gain, which is quite a move for a stock in this price range.

Yesterday, POT came to within $3.00 of the 121.29 target that is IN PLAY off the Symmetrical Triangle breakout (pattern in black) before pulling back, so the shorts might get some relief.

This chart is a reverse illustration of what we witnessed last autumn, when the Bulls kept buying technical breakdowns because they thought that stocks were too cheap, or that stocks had gone down too much, known as "knife catching." In the current time-frame, Bears got steamrolled shorting, not only an upside breakout, but a TRIPLE upside technical breakout because that thought that it was only a bear market rally, or that the stock was too expensive.

OUCH! OUCH! OUCH!


From May 12, on XING:

"It now looks to be "champing at the bit" for a breakout. XING needs to knock out the triple highs of 2.19, 2.12 and 2.14. If it can, first resistance would be 2.70 - 2.84, the bottom of the Kumo (Cloud) in the weekly chart, and the December, 2008 high of the Falling Channel, respectively."

2.20 got printed, and some more buying above that, with some blocks thrown in. 100-Day average volume for XING is only 180,000 shares. Yesterday was a five-month high in the stock on three times average volume: 540,000 shares.

XING eased off just a bit at the close, to 2.15. I would like to have seen the stock put it away, above 2.19, but it's "turning the corner" higher, like AAPL did when it took out its triple top at $103.00. We'll see if XING can capitalize on yesterday's move higher.

From yesterday morning's Comment Section, pre-market:

"Pan American Silver (PAAS) is looking interesting here. The H&S Top breakdown in the intraday chart, below the 18.68 - 18.68 neckline, looks to have been a Bear Trap since the stock:

1. has rallied well above that
2. has taken out the high of the Right Shoulder
3, and, almost has taken out the 20.10 high of the Head."

Shortly after that comment, I saw that PAAS was indicated to gap up at the open. BID: 20.05...ASK: 20.25. The high of the recent consolidation pattern, which looked to be a possible H&S Top, was 20.10, so a print of 20.11 would be confirmation that the pattern was, indeed, a Bear Trap.

I entered my order to buy just before the open, at 20.15. Have you ever felt that "they" are out to get you? "They" opened the stock at 20.21, and "they" took it down to only 20.16, ONE PENNY above my order and left me standing at the station while...

...PAAS raced higher, and the Ascending Triangle target of 20.77 from the early May breakout got MADE in the first half hour of trading.

Arrrrrrrgggh! LOL.

After PAAS put in early morning highs of 21.35 and 21.34 (White #1 on the chart), it pulled back in what looked to be shaping up as a Bullish Falling Wedge. That broke out, and PAAS took out the high of 20.81 (White #3) and got to 20.87, a "higher high," giving the suggestion that a low was in at the 20.47 low of the Bullish Falling Wedge (White #4), and that the pattern was a Bullish Continuation Pattern.

I bought the pullback from there, at 20.67, with a stop below 20.47, the low of the Bullish Falling Wedge, for a nice risk:reward entry. Risk: only twenty-one cents.


As we know, Bullish Falling Wedges are weak bullish patterns, and they often "morph" (change) into something else. This one appears to have morphed into a Cup & Handle-ish pattern. The "handle" part of a Cup & Handle usuaally has a downward slope, and this is a Rectangle, but we never like to quibble unless "They" leave us standing at the station over the matter of ONE PENNY ;)

I was wanting a breakout of The Rectangle before the close, back to the morning highs, but I didn't get it. If I had, I would have held some shares, and I definitely would have held some shares if I had gotten filled at the open, at 20.15 (Curses!), but given my late entry at 20.67, I said, "Deal!" near the close, and took the money.

Gain; $700, and I'm happy to have that, given the way that "They" disabused me at the open yesterday morning. LOL.