DRYS: Possible Bearish Gartley At $94-ish

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Bearish Gartleys and Bullish Butterflies probably are even more arcane than the Wolfe Waves that we've been discussing, and I'm certainly no expert at either one, or at anything else for that matter. LOL.

I think that the man who originated the former is Patrick Mikula (something like that), but he might only have done a lot of work on the patterns. I'm not sure. But, what I like about ALL of those rather quirky, non-traditional patterns is that they provide a way of identifying patterns and moves that the more traditional patterns don't.

Gartleys, Butterflies and Wolfe Waves all identify where players in the market are "wrong-footed," or crowded on one side of the trade, deceiving the proverbial "everyone."

In this DRYS chart, for example, we have the BIG, dramatic move down from the October high, similar to the sharp, directional "Lead-in" in a Wolfe Wave. From the low in January, DRYS has made two successive moves higher, so we've got "higher highs, and higher lows." We all know that's "supposed to be" bullish, and therein lies the deception! They turn out to be BEARISH "if" they are a valid Bearish Wolfe Wave, or a valid Bearish Gartley like this pattern in DRYS "might be," so we need to watch for that possibility.

There are all kinds of Fibonacci relationships between the moves in these Gartleys that I don't remember, but basically, we're looking to see if the current move from Point C to Point D is roughly equal to the move from Point A to Point B, which would be 94.06, and then see if the stock fails. Notice also that if you connect the two highs and the two lows, the pattern also looks like a BIG Bear Flag/Rising Channel.

In this particular case with DRYS, we've also got the top of the Cloud coming in last week at 94.61, very near the 94.01 area of the "possible" completion of the Bearish Gartley. The Cloud in the Ichimoku Kinko Hyo Chart ("At a glance...the Table of Balance") represents support and resistance. We can see that during the HUGE bull run, DRYS was well above the Cloud, with support below. No probem. On the first selloff into January, the top of the Cloud was support at Point A, and DRYS had a nice rally to Point B. On the second selloff, however, DRYS went below the Cloud to Point C, and throughout this rally to Point D, DRYS has being rallying into the Cloud, which now represents overhead resistance, and the stock hasn't quite gotten through the top of it yet.

Frequently, when a stock finally gets to the top of the Cloud,it's exhausted from battling through that resistance, and it sells off. Not always. There isn't any "always" in the stock market. LOL. But, given the fact that the completion of the "possible" Bearish Gartley "happens" to coincide with the top of the Cloud in the $94s, that's a reason at least to be vigilant if DRYS moves up to that level.

Lastly, what favors DRYS going higher and negating the "possible" Bearish Gartley is the fact that the MACD is looking so strong. That could get negated, too, but it does look good, per the comments on that chart above.