AMZN And GOOG: Gap Up Openings

From yesterday on GOOG:

"Anything above the bottom trendline, at 537.28 for today, is "Ye Olde Knuckle-biter" for The Bears because the stock would be back inside the broken pattern and The Bears "shouldn't" allow that, other than for an intraday gap fill, but then they would need to smack it outta there."

This chart of AMZN is the type of thing to which I was referring yesterday morning. AMZN opened Gap Up, but it was a Gap And Crap opening, and The Bears immediately smacked it for a loss of $12.

The GOOG Bears didn't show up until late in the session, and it was a poor showing at that.



GOOG opened on a Gap Up, but it was a Gap And Go instead of the Gap And Crap that AMZN experienced. After a brief pullback, GOOG rallied to a new morning high of 542.83, well inside the broken Channel in the daily chart.

GOOG pulled back again from 542.83 and The Bulls hunkered down, formed a Bullish Falling Wedge, then broke out of it to the upside, suggesting a retest of the 542.83 high, and possibly higher.

I shorted 500 shares of GOOG in the 542.60's, playing it for a Double Top.



Nope! NOT a Double Top. Curses!

My entry short was at the first white arrow, and I got squeezed immediately. I didn't cover my short because GOOG already had rallied above the stacked resistance that we discussed on Monday morning, and it now was rallying farther into resistance. The rally didn't look sustainable, and I was willing to give the trade a chance.

My decision to hold short wasn't a horrible one, but it wasn't a good one either. I was caught out of position on the breakout into the $543's and was under water a little over $2,000 at the 547.05 session high. The trade "could have" ended with a loss like that, if GOOG hadn't finally sold off a little at the end of the session, which wouldn't have been anything dreadful, but it simply wasn't good play on my part.

In the final hour, The Bulls ran out of steam and I got a chance to cover my short with a gain (second white arrow) and I took it. I covered in 541.50's. While it looked like GOOG "could" tank into the close, I wasn't going to press my luck. It also looked like the session "could" finish with "Ye Olde Knuckle-Biter" for The Bears, with GOOG closing inside the broken Channel.



GOOG did close inside the broken Channel, presenting The Bears with "Ye Olde Knuckle-biter," leaving them wondering if the breakdown was for real, or not. Often, those moves back inside a broken pattern are just a "One Day Wonder" and The Bears end up knocking it outta there, but they are uncomfortable for The Bears when they occur (the opposite of that for The Bulls, when a stock closes back below an upside technical breakout).

The slope of the lower trendline is 1.78546, so we "move the chains" by that amount and the trendline comes in today at 539.065. Yesterday's close was 539.34, so The Bulls and The Bears will have at it "right there" at this morning's opening kickoff ;)



Gain: $550