I had a perfect entry into that trade, which is the primary reason that I made the $1,300 in about an hour. I don't mean that as patting myself on the back, but rather, that my 17.94 entry at the retest of the broken neckline is where we have an excellent chance of a successful trade, technically.
The idea is similar to getting your money "all in" with the best hand in Texas Hold 'Em poker. We'll win more of those than we lose. Only in the stock market, PLEASE don't go "all in." This isn't Texas Hold 'Em. LOL.
"Former support 'should be' resistance on a retest," and as we could see from this chart that I posted on January 14, it was. Morgan never went any higher than that, and down she went. One of the reasons that I grabbed the dough so quickly was that the market was very oversold and coming into a support area. Another reason that I cashed it in was that I didn't want to sit through a possible fill of the gap in the chart from just before the neckline breakdown, which frequently occurs. In this case though, there was no problem on the short trade whatsoever.
In retrospect, selling half quickly and holding the remaining half for the target IN PLAY would have been a very nice way to trade it. "Coulda...shoulda...woulda." LOL.
Eyeballing the intraday chart (hard to measure exactly), The H&S Top target was "roughly" 14.90, On the daily chart, I came up with 14.77. Both MADE on Friday as Goldman fell to the low 14's, then bounced. Targets aren't exact anyway. It's "what we're aiming for" based on what the pattern measurement suggests.
In addition to reviewing the pattern and the play of the trade, I've presented this in preparation for my post on the GLD, which also has had TWO "perfect entries" on retests of broken support, one of which has proven to be much more difficult than this one in Goldman. The outcome of the other "perfect entry," which was to short Friday's close, remains to be seen. We'll look at the GLD in my next entry this weekend.
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