FCX, X, And AMZN

I like the fact that while the general market has been selling off, FCX has been holding up pretty well and showing decent relative by NOT breaking down below the bottom of the Falling Wedge and the top of the Ascending Triangle, the latter of which was a successful pattern breakout. The 52.28 target got MADE.

During the formation of the Ascending Triangle, we will remember that FCX met with QUINTUPLE resistance (5 red arrows) at the bottom of the Falling Wedge, so it wouldn't be unreasonable for the stock to go down there for a second retest of support. If it does, we would want to see that validated trendline support hold on a CLOSING basis. FCX has just under one point of "wiggle room" between yesterday's close of 49.76 and that trendline, currently at 48.825.




Not getting my order filled to re-renter short 2,500 shares of X, at 43.00, late Monday afternoon turned out to be a RARE "blessing in disguise." I was able to short it yesterday morning at a higher price (first white arrow). I covered on the first selloff and again re-shorted on the next rally (second white arrow). I covered that postion for a combined gain of $1,000 on the two trades and was ready to short it again, but decided to focus on shorting AMZN instead.



AMZN has been exhibiting interesting behavior lately. On June 1, it bounced higher off Trendline #1-#3, validating it as support, but then it broke that validated trendline in the very next session.

Very interestingly, in yesterday's session, AMZN rallied back to that trendline, got a little above it, then sold off, validating Trendline #1-#3 as resistance. Late in the session, AMZN presented this interesting shorting opportunity:



This is another of those "unorthodox" H&S Tops that we've looked at quite a few times. The Right Shoulder "shouldn't" be higher than the Left Shoulder, and the volume "shouldn't" be lowest in the Left Shoulder. Volume also "should" pick up on the breakdown. It didn't. Regardless of those "rule violations," the target got MADE.

The high of the Head was 190.21. The neckline data points were an identical 189.27 ... 189.27.

190.21 - 189.27 = 0.94 points of downside on a break of the neckline. 129.27 - 0.94 = Target: 188.33 IN PLAY.

I shorted 189.22 on a retest of the 189.27 broken neckline, allowing for AMZN's wider than usual spread between the bid and the ask. I covered my short when the 188.33 target got MADE, but got a lousy fill of 188.38-188.40. They call that "slippage." I call it "stealing my money." LOL. That's fine. Gain: $800.

Regarding this H&S Top, while we don't want to flaunt rules of technical analysis, we also don't want to be rigid about them. It ain't rocket science. "If it walks like a duck...quacks like a duck...we probably are looking at a H&S Top that walks and quacks kinda funny."

Notice, by the way, that Head of the pattern was a "nested" Symmetrical Triangle (pattern in yellow) within the overall H&S pattern. "Nested" patterns seem to give pattern targets a better chance of getting MADE, but there's no "always" in the stock market. It's a game of probabilities. If the trade hadn't worked out, I would have stopped it out above the high of the Right Shoulder for about a $600 loss.

Not a great risk:reward trade, but I was favored to win it, shorting a retest of a broken Nested H&S Top pattern.



Gain on the session: $1,800