Bearish Rising Wedges often morph into a H&S Top, or some other bearish pattern. In this case, the latter would be the Symmetrical Triangle (in red). The bottom of that pattern is a validated trendline. XOM had a good bounce off that on January 15, so unless/until that gets broken to the downside, the chart is Neutral.
The GLD was an upside surprise this week. After breaking below a Bear Flag and CLOSING below the channel, it ripped to the upside and closed at a new high for the move. Fortunately, the Bullish SLV chart (posted last weekend, and again yesterday) kept me from shorting the GLD.
The case for a Bullish Inverse H&S in IBM primarily is supported by:
1. The volume looks right. Highest in the Left Shoulder, next highest in The Head, lowest in the Right Shoulder.
2. The breakout was on thin volume, but on a retest, the neckline held as support, within four cents.
3. The low of the Right Shoulder never was violated.
A good case can be made that the thinner green line is the neckline, which makes more sense from the standpoint that volume came in on the breakout above that.
IBM needs to get to at least $106-ish to support the Inverse H&S thesis.
4 comments:
Melf,
In the past you have had calls on UYG, I just read Maurice Walker's charts of the Chart Pattern trader and he is especially bullish. I was wondering if you had a current opinion. I check Walker's work on the Stock Charts public pages if you wish to see what he says.
Good Morning, Mark,
My opinion of the UYG is that the symbol should be changed to UGLY ;)
In the Hourly chart, there's a little Rectangle that will break out this morning on the rally in financials. The highs are 3.39 and 3.43. The lows are both 2.79.
I use the more conservative of the highs (3.39), so the breakout will put a target of 4.05 IN PLAY. There's a gap at 3.82 that "should" get filled. On a serious short squeeze, the UYG could go a lot higher, but I'm not going to chase a big gap up this morning, which looks to be on tap.
Good luck if you own it!
I don't generally play financials as I have a large long term position in a brokerage firm with whom I had been assoc.
Okay, Mark. Big gap up in the UYG this morning. Too big to chase, for my taste. The 3.82 gap target got MADE.
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