Goldman Sachs (GS), whose chart has been perfectly dreadful lately, gave an upgrade of the commodities yesterday. The upgrade gave FCX and commodity-related stocks a nice pop.
Notice that all four of the recent pattern technical breakdowns in Goldman were excellent shorts. All of them were on a gap down, and none of the gaps has been filled to date.
There are some other comments on the chart, on the technicals.
The Goldman upgrade sent FCX back to Trendline #2-#4, where The Bears again defended it, establishing QUINTUPLE resistance. The problem for The Bulls is that all of the candles inside the big blue Falling Wedge (and prior to that formation) represent a goodly number of shareholders who are very disappointed that the great earnings, the fifty cent dividend and all of the analyst upgrades haven't done anything for FCX. Many of those shareholders want out of a losing position, plain and simple, and they know the drill. Yesterday's rally above 49.00 was a "rinse and repeat." Weak-handed longs took the rally as an opportunity to get out of the stock. That has nothing to do with the value of FCX. That's technical selling. Sell at resistance.
On the positive side:
1. The May 16-18 3-day pattern does have the look of a Bullish Morning Star, which is one of the more bullish patterns in the candlesticks.
2. The candles below the Falling Wedge form an Ascending Triangle (the flatish top is off a bit, but it's close enough just using yesterday's 49.19 high and the May 20 high of 49.17).
3. The Ascending Triangle contains a Bullish Island Reversal in the intraday chart, coming off Data Point #4 (see next chart).
4. If The Bulls can mount a rally a take out the top of the Falling Wedge (Trendline #1-#3), all of this trading below Trendline #2-#4 will be a Bear Trap, similar to what we had at the left of this chart, March 10-14.
The top of the Falling Wedge also is the top of the Kumo (Cloud), so FCX would be back in Bull Territory if it can get up there. That's getting ahead of ourselves, but it's the kind of thing that The Bulls need to do.
The circled area (Monday's trading) coming off Data Point #4 is the Bullish Island Reversal. The candles are detached from the prior session and also detached from yesterday's session. It isn't necessarily bearish if that gap gets filled, but it's much more bullish if it doesn't get filled, prior to an upside breakout. Bears who shorted Monday's gap down and who didn't cover their short would be "stranded on that island" on an upside breakout, which is the purpose of an island reversal.
What we don't want to see is Trendline #2-#4 get broken to the downside. Look at the last Ascending Triangle (the pattern in yellow). It broke out to the upside at the first yellow arrow, then gapped down below Trendline #2-#4 on the fifty cent dividend payout. That gap down was "The Tell" that the Ascending Triangle had morphed into a Bearish Rising Wedge, similar to the April 11 breakdown in the daily chart after the Bearish Wolfe Wave Double Breakout/Fakeout. The May 11 gap down (second yellow arrow) didn't fool around. It was a clear gap down, below that trendline. UGH.
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