FCX: Inverted Hammer; RIMM: Being Hammered

From yesterday:

"All that we got from Friday's session was bearish confirmation."

Still no bullish confirmation of Thursday's Doji Star. The general market and commodity stocks were up yesterday, but FCX was quagmired below 48.80 resistance (Black Trendline #2-#4). The session was a "possibly bullish" Inverted Hammer, but as with Thursday's Doji Star, we need confirmation of any bullishness, beginning with an upside takeout of 48.80.



In the past two sessions, FCX has been showing a penchant for H&S patterns. The first one that emerged yesterday was a H&S Top ( pattern in red), which was nested within a Symmetrical Triangle (pattern in white), and was a "morph" after a broken Rising Wedge formation (pattern in yellow). The breakdown of that Double Nested White Symmetrical Triangle* earned FCX a trip back to the session low.

* (The two patterns, Rising Wedge and H&S Top, were "nested" within the White Symmetrical Triangle, so it was double nested. Multiple patterns tend to give more reliability to breakouts and breakdowns).

The second H&S pattern (pattern in orange) was a H&S Bottom! The neckline was 47.65. The low was 47.40, so 47.65 - 47.40 = 0.25 pts of upside on a breakout of 47.65. 47.65 + 0.25 = Target: 47.90 IN PLAY. FCX rallied to 47.89. That was a score for The Bulls, but unfortunately, they blew it very badly going home, allowing The Bears to send them down for a THIRD retest of 47.40. UGH.



Removing all of those intraday patterns off the morning low of 47.41, trading, essentially, was this range-bound Rectangle. Triple Bottoms in bearish charts (like FCX) aren't rated to hold as support, and technically, this one didn't. At the end of the session, The Bears broke it, to 47.37, but The Bulls managed to pull off a "Cliffhanger" by closing it out at 47.41. Admirable that The Bulls stuck the close, but that's a very weak performance and sloppy, sloppy, sloppy!

The Bulls need to eat some spinach and quit fooling around here. First order of business for them is to go up an knock out the 47.89-47.92 highs of this Rectangle.



MarketBeat
WSJ.com's inside look at the markets

JUNE 20, 2011, 1:18 PM ET
Research in Motion: Bernstein Bails, Another Leg Down

"...Dow Jones reports that Bernstein, which had upgraded RIMM to “market perform” on May 18, has thrown in the towel once more, reducing RIMM to “underperform.” Way back on May 18, RIMM raced to $45.47 as Bernstein opined that “Things Can’t Get Worse in the Foreseeable Future.”

Apparently, the Bernstein crystal ball needs some cleaning, since things seem to have gotten worse.

The Journal’s Heard on the Street late last week noted that RIMM is starting to look unbelievably cheap, trading at less than 5 times expected reduced forward earnings expectations. But looks can be deceiving. “It may look cheap,” the Heard writer says. “But a handset maker that can’t deliver new handsets is hardly a bargain for investors.”

A couple of takeaways from that WSJ piece:

1. When a stock is experiencing a wicked Smackdown and someone says, "Things can't get much worse in the foreseeable future," be ver-r-ry afraid.

2. When a stock is experiencing a wicked Smackdown and someone uses a low P/E ratio to justify owning it, be ver-r-ry afraid.