(Click On Charts To Enlarge. Click On Them Again For Further Enlargement. Use The Back Arrow On Your Browser To Return To Narrative).
At yesterday's low in RIMM, the H&S Top target of 47.57 got MADE, within two cents. When any target gets MADE, that doesn't tell us anything about "what's next." It simply means "we're done" with that H&S Top pattern. It also means for shorts that it's a good idea to "take profits, or at least 'some profits' when targets get MADE."
This is the chart of SLW that we looked at after we were wondering (question marks on the chart) if the DOUBLE Symmetrical Triangle upside breakouts were Fakeout/Breakouts, or not. The break below Trendline #1-#3 was THE TELL that it, indeed, was a Fakeout/Breakout.
THE TELL often is followed by a significant move in the opposite direction, as we can see in the next chart.
Coming off a little Bear Flag (see next chart) after the Rising Wedge breakdown, SLW initially found support at the gap. The next rally failed, and SLW sold off to the bottom of the Rising Wedge, then broke below that in yesterday's session, so it's still trying to find support.
For review, this is the "Before" chart, which shows the DOUBLE upside Fakeout/Breakout, prior to the "morph" into the Rising Wedge (last chart), and subsequent technical breakdown at 44.44, on April 11.
This chart is one of many examples of why I stress FOLLOWING Ms. Market and looking at what "IS happening," independent of what we think about what the stock "should be" doing, or what we might think about the price of the underlying commodity, etc. When support gets broken, it's not a bad idea to "get outta there," and ask questions later.
From yesterday morning:
"Since we had the confluence of the 19.59 Double Top target (intraday chart), the 19.61 gap (intraday chart), and the 19.64 Double Bottom pivot (daily chart), The Bulls did their job and stepped in AT SUPPORT, thus the 19.63 low.
That sets The Bulls up for a chance at breaking out of the Falling Wedge (the pattern in white) in this chart if they can "bring it" into today's session."
NVDA's gap down opening yesterday, at 19.50, back below the Double Bottom breakout and back below all of that nice support that The Bulls found in the prior session told us that The Bulls didn't "bring it" into yesterday's session.
The "Knuckle-Biter" is on, meaning that anyone who bought the Double Bottom breakout, above 19.64, has a problem. They're sitting with a paper loss with the Double Bottom target of 22.27 ON HOLD, unless/until The Bulls can take NVDA back above 19.64 again, and obviously, there's never any guarantee that they will, thus, The "Knuckle-Biter."
I wanted to get long NVDA if The Bulls could have taken out the top of the Falling Wedge in the intraday chart that we looked at yesterday morning. That would have been a "continuation pattern" breakout to the upside, giving some confirmation of the Double Bottom breakout in the daily chart.
Instead, it was gap down, below support? In a word: YUK. If this is "just a knuckle-biter" and NVDA is going back above 19.64, I'd rather wait for that to occur, rather than become a bagholder and watch NVDA head lower, if the Double Bottom breakout turns out to have been a Fakeout/Breakout.
As we know, FCX has been in recovery mode since the release of earnings, digesting the gains off the The Smackdown low of 49.71, following the Bearish Wolfe Wave and H&S Top breakdowns on April 11. In the last five trading sessions, FCX has been trading sideways, essentially, above 54.00, but it broke below that in yesterday's session and went down and filled a gap left in the chart from last week (horizontal red line).
Gap fills are common, and are to be expected, but the problem with this particular gap fill was that everything above the horizontal white line after the gap fill now is immediate short-term RESISTANCE. All of the players trapped above 54.00 represent an "overhang of sellers," similar to what we've been discussing with respect to the daily chart. The players above 54.00 were expecting the resolution of this consolidation phase to be the UPSIDE, but they didn't get it.
FCX has been good to me on my last 23 trades in the stock on the long side (all of the real-time executions have been posted with explanations, for learning purposes). When I saw the breakdown, I really, really didn't want to short it. That "emotional bias" is a flaw in my trading. I've grown fond of FCX and want to see it do well, and that's a mistake that costs me. I "should have" shorted FCX on the April 11 DOUBLE breakdown, when I sold my core 500 shares at 56.64. I didn't.
"Don't fall in love with stocks. STOP THAT, Melf!"
Okay...okay, you don't have to yell at me. Sheesh.
When I saw the breakdown (I was watching other stocks), FCX already had retested 54.00 (the white arrow), and failed the retest. Next resistance was 53.84 (horizontal red line). Since "those Buzzard Faces" have been giving me fits lately, NOT filling my orders, I placed a limit order to short FCX at 53.81, slightly below the 53.84 resistance, and got filled immediately. FCX got to 53.85, then sold off toward the gap-filling low (horizontal red line).
Despite the fact that FCX looked to be headed much lower given the breakdown below 54.00, which put the 51.95 earnings gap IN PLAY, I covered on the approach to the gap-filling low in the 53.30's, just in case it was a "Fakeout Breakdown."
FCX dipped below KEY SUPPORT intraday then managed to close out the session above it, but the 51.95 gap from the session prior to the release of earnings still is IN PLAY from the technical breakdown in the intraday chart above. If I were coaching The Bulls, I would have them allow the 51.95 to get filled early in one of the next few sessions, pop open copious cans of spinach at the low, then rally outta there on a nice Bullish Hammer, or a Doji Star Hammer, and CLOSE the session back above KEY SUPPORT.
Unfortunately, only Ms. Market gets to call the plays. Curses!
The 51.95 gap area also is important support, basis the Ichimoku Kinko Hyo chart. The bottom of the Kumo (Cloud) currently is flat-lining, at 51.92. Notice how in the April 18 session, FCX dipped below the Kumo (Cloud), intraday, then finished the session out on a Bullish Doji Star Hammer (it only was bullish because of the upside follow-thru...those aren't always bullish). Prior to the release of earnings, FCX was poised right at the top of Kumo (Cloud), so it technically was "good to go" on any earnings that were half way decent.
So-o, that 51.92-51.95 area is next KEY SUPPORT on any further selloff. A minor intraday dip below there, ala April 18, is fine, but much more than that, especially on a closing basis, puts FCX in Bear Territory, below the Kumo (Cloud).
Gain on the FCX short trade: $1,025
Gain on the 24 FCX trades since March 23: $18,400
No comments:
Post a Comment