GOOG: Bearish Pattern Breakdowns

From yesterday on GOOG:

"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 Bears got it done, but there was a little more discomfort for them in the early going, as The Bulls took GOOG higher with a Gap Up, and higher still in what turned out to be a Bearish Rising Wedge move (pattern in white) to a top at the Head of a H&S pattern (pattern in yellow).

I liked the neckline breakdown on the long red candle (horizontal arrow) and wanted to short any retest of the broken neckline, or any attempt to get through the bearishly inverted EMAs (yellow down arrows).



In the 5-Minute chart, The Bulls were holding at the gap (horizontal white line), so since a rally to the EMAs (white down arrow) seemed to be in the offing, I decided to get long 500 shares of GOOG at 536.85 for a quick rally to 539.00 - 540.00 EMA/H&S Top resistance, then reverse and go short.



The Bulls managed to break out of this Ascending Triangle and get to 539.00, but The Bears sent them back inside the triangle for "Ye Olde Knuckle-biter." I wasn't interested in a knuckle chew, especially since I was wanting to get short, so I threw it in at 537.50 for a $300 gain and planned to short any further rally, or a breakdown of 536.00 gap support (horizontal white line in the chart above).



The Bulls did have another rally in them, to 539.53 at the top of a Rising Channel and the bearishly inverted EMAs. On the heels of the broken H&S Top earlier in the session , the Rising Channel "should be" a bearish continuation pattern and resolve to the downside. I shorted 500 shares of GOOG at 538.75 on that rally (white arrow).



The Bears morphed the Bulls' Rising Channel (in white) into another H&S Top (in yellow), then broke it to the downside. Lovely. Notice the failures at the bearishly inverted EMAs (three yellow down arrows). Lovely.

What wasn't lovely at this point in trading (1:00PM) was that The Bears had allowed The Bulls back inside the broken H&S Top pattern on the broken neckline retest, for a "Ye Olde Knuckle-biter," leaving me wondering if The Bears ever were going to get it done on the downside. UGH. I lowered my mental stop to "cover an upside takeout of the high of The Right Shoulder," which at least would give me a small gain if I got taken out.

Get it done, Bears, dang it! LOL.




FINALLY!!!

The Bears rejected The Bulls' bid to get through the second H&S Top and also knocked out 536.00 Gap Support. That put the 532.93 top of the Gap from September 26 IN PLAY, where I planned to cover my short in case of 536.00 retest rally.



GOOG has a wide spread between the BID and ASK, so I covered at 533.25, allowing for some wiggle room and for the possibility that the gap wouldn't get entirely filled prior to a possible retest of 536.00. As we can see, though, the gap did get filled completely.



I took a much needed nap after I covered so I didn't get to see if the Bulls would be able to retest broken 536.00 support, but they did. The Bulls rallied to 535.88 in another rising Channel (the second one in yellow), then The Bears took over and spanked The Bulls into the close.



Advantage: The Bears



Gain on the session: $3,050