GOOG: H&S Top Breakdown

From the weekend:

"As we've witnessed in the past, Bearish Rising Wedges/Channels (pattern in blue) often morph, or change, into a Bearish Head & Shoulders Top (pattern in black). The Right Shoulder rally, which we got this week, usually is a failure to regain and hold the broken Bearish Rising Wedge or Rising Channel, then the stock comes down and breaks the neckline, which hasn't yet occurred."

Yesterday, The Bears took out the neckline of the "morphed" H&S Top on a Gap Down (red arrow), "Gap And Go" session. The Bulls tried to establish support in the mid-501's (horizontal white line), but it was no good. The Bears took out that support (white arrow) and The Bulls were shut out of it for the remainder of the session.



The downside expectation for the Rising Wedge (pattern in blue) is some kind of retest of the 490.86 low of the pattern. Rising Wedges can be tricky. Sometimes the pullback after the breakdown is more shallow than that, maybe a 50% or a 61.8% of the height of the Rising Wedge, then the stock rallies.

However, if the Rising Wedge morphs into a Head & Shoulders Top, as this one did, then there usually is more downside than that, as we witnessed in GOOG yesterday. A multiple pattern breakdown (Rising Wedge and H&S Top) tends to pack some punch.

Targets only are what a given pattern breakout or breakdown suggests, based on a measured move off the pattern. GOOG should be reporting earnings in a couple of weeks, so the fundamentals "could" trump the poor technicals. In the interim, downside targets of 390.86 and 368.42 are IN PLAY. The math for the H&S Top target is at the top of the chart.