AKS, MS, And FSLR

AKS opened down on the JPM upgrade Friday morning. I found that interesting because the stock had a little Fakeout/Breakout on Wednesday (the Doji Star) that didn't hold on a closing basis, then a breakout on Thursday that did hold on a closing basis, but that did not take out Wednesday's high.

Notice that Wednesday's candle was a sell pivot candle based on the 21/34 RSIs being at Bearish Synchronicity. The "sell" was confirmed by that particular indicator when the low of that session got taken down in Thursday's session. The sell is negated if the high of that candle is taken out. Notice also that we had a sell from the 8/13 RSIs at Blue #3. Those "fastest" RSI signals usually are good for a quick trade, as this one was. It was good for nice day trade the following session when AKS gapped down below the "pivot day" low.

But, also notice that this chart is a great example of what I mean when I say that we do not allow indicators to TELL US what to do. Indicators don't know what the chart looks like when they "give us" a buy or sell signal. They only are tools for us to use, and it's up to us, as analysts, to decide whether or not to buy or sell.

In this case, the trend is bullish, and when the 21/34 RSI's gave us a "sell" on Wednesday's apparent Fakeout/Breakout candle, we had our four Data Points of a BULL flag. In my view, it would be fine to go ahead and short it on the apparent breakout failure, but stop it out (Buy To Cover), if the high of the "pivot candle" gets taken out to the upside (which it did on Friday) and even consider reversing, and going long.

I hadn't looked at AKS for the past few sessions until I heard that JPM upgraded it. When it started down, my plan was to buy it if it returned to UNCH, but it happened so quickly while I was looking at other things, I missed it. I don't like using Buy stop limit orders/ I've never been comfortable with entering those automatic orders. I feel that if I enter a limit, they'll blow right past me and not fill it, which sometimes happens to me on limit orders, or that I'll get a lousy fill if I don't use a limit. That's neither here nor there, that I missed the trade. The more important thing is the discussion about these "sell pivots" and the pattern that broke out.

One of the stocks that I was watching was Morgan. We discussed the Triple "nested" H&S Top last weekend (the pattern in red), then the Double H&S Top fractal in the intraday chart, a few days ago.

Just about the last thing that I expected to be doing on Morgan was getting LONG the stock, but that's what I did yesterday, based on this "nested" Symmetrical Triangle (smaller one in yellow, "nested" within the larger one in white).

It is said that triangles that go beyond two-thirds of the way toward the apex (where the trendlines converge) are much more likely to fail to breakout than triangles that breakout prior to the two-thirds point. I went ahead with it anyway and bought it for 28.05, based on the fact that it was a "nested" pattern, which I like a lot, and I didn't plan to play it beyond the 28.47 high of the smaller Symmetrical Triangle, given that we've still got the H&S Top target of 27.25 IN PLAY.

I also figured that a breakout would be a "surprise attack" from The Bulls, which would squeeze the shorts higher and have them retreating back for another defense of the neckline of the broken H&S Top, which they "own."

I sold at 28.46, right below the high of the smaller Symmetrical Triangle (Yellow #1), but Morgan did breakout above that, and squeeze the shorts back near the recent neckline retest highs of 28.88 and 28.90. Friday's session high was 28.82. Morgan now is "in the in betweens," below the H&S Top breakdown, but above the Double Symmetrical triangle breakout (I didn't measure these targets since all I wanted was 28.47).

NOTE: The top of the Yellow Triangle is a validated trendline, with the third "hit" at the yellow arrow. Breakouts above/below those "usually" have some significance, as this one did.

In the daily chart, which doesn't show the intraday Symmetrical triangles, Morgan has headed back up in the direction of another retest of the H&S Top neckline. If I were coaching for The Bulls, I would have them leave Friday's high in for a "flatish top" of an Ascending Triangle, at 28.90 and 28.82 (Purple #1 and #3), and go down an put in Purple Data Point #4 for the ascending line of the pattern, then go at The Bears on an Ascending Triangle breakout.

If I were coaching for The Bears, I'd chew them out for NOT making that 27.25 H&S Top target yet, and for allowing The Bulls to breakout of that DOUBLE Symmetrical Triangle! LOL.

Since FSLR also appears on the Real-Time Execution screenshot below, a brief explantion of the trade. As you will recall, FSLR had a HUGE Breakaway Gap on earnings, but didn't even get close to the 235.31 target that is IN PLAY, prior to breaking down below what "should have been" a Bull Flag (pattern in black).

Friday morning, FSLR put in a new low for the move off the 207.51 high, was looking "bull flaggy," and it rallied about $7.00 off the morning low.

I went long on the pullback for a "momo" play with a little over a dollar stop. Later in the session, FSLR held the earlier 159.91 pullback low, printing 159.90 (probably busted a hard stop, a penny below the 159.91 low), but it didn't do anything else on the upside.

Late in the session, I figured that I probably had a chance to get out for a 161.10 "break even," but I didn't want to risk giving back all of my gains in Morgan, so I raised my mental stop to "the mid-160.20's" and threw it in for a loss when I saw the BID moving down to that level.

As it turned out, FSLR did rally to my 161.10 break even shortly before the close, but I also "could have" lost all of my gains in Morgan. I view that situation as making a business deal. "Yeah, I'll take the small gain, rather than come out of the session with a loss."

Morgan Gain: $1,050. FSLR loss: nearly $850. Gain on the session: roughly $200.