GG And AZO

From yesterday morning, on GG:

"GG still is looking like a H&S Top...The Left Shoulder should be wider than the Right Shoulder and so far, that's alright, but GG would need to break the neckline fairly soon."

Would the first hour of trading yesterday be soon enough? Wednesday's close in the HUI, above the channel and at a new high for the move, was a dirty deal! LOL. Sheesh...

GG gapped down to 33.93, printed a high of 34.05, then tanked and broke the neckline of the H&S Top in the first hour of trading! And, yes, I watched it, saying, "Please tell me that you aren't serious, Ms. Market!" LOL.

Although the neckline CLEARLY got broken on the print of 32.31, I wasn't about to short it with GG already down 7% on the session. Horizontal resistance (the horizontal red line) was 33.22, so I entered an order to short GG just under that, at 33.21.

No dice. They printed highs of 33.15, and wouldn't let me have it that close to resistance. I can't really blame them. Meanwhile, I had my AZO long trade coming back in my face after being up almost $1,400 from my morning entry, so I threw that in for about $160 gain. We'll get to AZO in a minute, but what a frustrating morning! LOL.

If they had let me have GG short for 33.21, I would have thrown that in at the close, as well, because of this 5-Minute Chart. The entire session, after the early break of the neckline in the Hourly Chart, is a Rectangle that is set up for a possible Double Bottom, or "W-Bottom" (they're synonymous) breakout. The highs are 33.15. The lows are 32.31 and 32.32. I didn't like seeing GG finding late afternoon support at the early morning low and I'm suspicious that it might try to make a bid to fill yesterday's opening gap up near $34. If this Rectangle high of 33.15 should get taken out to the upside, that would put a target of 33.98 IN PLAY, right near yesterday's open (33.93) and high of the session (34.05).

Math:

33.15 - Highs of the Rectangle
32.32 - The more conservative of the 32.31 and 32.32 lows

33.15 - 32.32 = 0.83 points of upside on a breakout. 33.15 + 0.83 = Target: 33.98 IN PLAY.

This Rectangle in the 5-Minute Chart is a VERY weak pattern, going up against the H&S Top in the Hourly Chart. Targets against the dominant trend (Hourly chart trumps 5-Minute chart) are less likely to get MADE so we'll see, if 33.15 gets taken out to the upside.



On Wednesday, AZO fended off the MACD "Kiss of Death" signal (explained below), and CLOSED at a new high for the move, inside this channel. That's impressive, at least to me, when a stock can fend off a signal like that, and we know that AZO has been very strong, technically.

After that strong performance, a Citi analyst downgraded AZO Wednesday afternoon, after the close. AZO opened down in yesterday's strong open for the general market, so I went with the strong performance in the chart, and bought it for $165.42. AZO rallied smartly to $168.19, looking like it would make a bid for the top of the channel, but then...

Tank...tank...tank... Curses! LOL. As I said, I threw it in for about $160 gain, and after my frustration with not getting my short trade off in GG, I took a break for awhile.

When I looked at AZO again in the afternoon, it had gone into a SERIOUS tank and had taken out the bottom of the channel. Whoa! The upward slope of the channel is 0.6909, so the bottom of the broken channel will come in today, April 3, at 161.628. The low of Wednesday's strong candle, when AZO fended off the "Kiss of Death" MACD signal, was 161.502, so if AZO should rally today, it should meet with some resistance there, at 161.502-161.628, on up.

The "Kiss of Death" signal is given when the MACD is below its signal line, tries to rally back above the signal line, "kisses" it, and fails. It can "come close," or go slightly above it, or nail it, but the key is that it FAILS, and price confirms the failure by moving to the downside.

The second red arrow wasn't a "kiss" since the effort fell short of the signal line before it turned down again, but "close enough." It made a second effort to turn higher and get above the signal line, but FAILED.

Conversely, in early March, the MACD had formed a Bullish Inverse H&S, came back and slightly below its signal line, and then WHACK, like a "slap shot" in hockey. In this particular case, we had one of those "perfect marriages" between great technicals and great fundamentals. AZO exploded to the upside on earnings out of the Bullish Inverse H&S and Bullish Slap Shot postion in the MACD and has been bullish since then, climbing its way through the Rising Channel.

Until yesterday.