Basis the 10-Minute chart, Tuesday's close was a break below the neckline of a H&S Top. As we've frequently discussed, anything back above the broken neckline is "Ye Olde Knuckle-biter" for The Bears. An upside takeout of the high of the Right Shoulder (white arrow at the horizontal red line) is a "shot across the bow" from The Bulls, warning The Bears that the neckline break at Tuesday's close might have been a Fakeout/Breakdown.
I liked the upside takeout of the 102.50 high of the Right Shoulder and bought 2,000 shares of GS on the pullback, at 102.09.
GS rocked steady during the morning and hadn't come even close to filling the opening gap, showing excellent relative strength vs. the general market, but unfortunately for me ...
... the benchmark S&P 500 had filled its opening gap entirely, and also had taken out its late Tuesday afternoon low to the downside. UGH. It had rallied back to the second level of horizontal resistance (top red line) in what looked to be a Bearish Rising Wedge (pattern in yellow).
Hm-mm...what to do...what to do...
Was GS going to lead the entire index higher, or was the index going to drag GS down with it, to fill its opening gap?
The latter prospect seemed more probable and I was sitting on a decent gain, so I decided to take the money and look for a lower entry back into GS, if I could get it. I sold my 2,000 GS for 102.52.
Less than five minutes after I sold, GS broke out above $103 and was gone on the upside.
CURSES!!! That danged S&P 500 threw me off my game. LOL.
What a deceptive move that neckline breakdown was at Tuesday's close, huh?! That breakdown ended up being Data Point #4 (Yellow #4) of a large Symmetrical Triangle with the H&S Top nested within it. The early session "shot across the bow" with the takeout of the Right Shoulder was followed by the Nested Symmetrical Triangle breakout and then quickly followed by a takeout of the high of the H&S Top.
Uh-oh for The Bears, caught short a Nested Symmetical Triangle breakout!
The measured move for the H&S Top went IN PLAY on the upside (add the points to the high of The Head) , as did the measured move off the Symmetrical Triangle breakout.
The top of the Symmetrical Triangle now is Key Support on any pullback (yellow arrow). Anything back below Yellow Trendline #1-3 is "Ye Olde Knuckle-biter" for The Bulls.
In addition to the Nested Symmetrical Triangle breakout in the intraday chart, The Bears also were caught short a Bullish Inverse H&S breakout in the daily, which no doubt accounted for some of the afternoon rally as they got squeezed into the $106's.
As with the top of the Symmetrical Triangle in the intraday chart, The Bulls need to defend the neckline of the Inverse H&S pattern on any pullback.
Gain: $850
No comments:
Post a Comment