Basis the 5-Minute chart, Friday morning's Gap Up opening was a Breakaway Gap out of yet another Inverse H&S! Notice that The Head of the pattern (in yellow) is a self-contained Inverse H&S.
Breakaway Gaps out of patterns have a better chance of being a "Gap And Go," rather than a "Gap And Crap." Although GS has scored 20 points off the Bullish Wolfe Wave Breakdown/Fakeout low of October 4 (rallied from 84 t0 104), basis the daily chart which we'll look at in a bit, the stock still is buried deep in Bear Territory, so Gap Up openings still are highly suspect.
The first white arrow was a successful retest of the neckline, then GS rallied. That retest was nice, but the gap still was left unfilled, which was bothersome. The rally off the neckline ended in a breakdown out of a Symmetrical Triangle (in green), which gave a strong suggestion that the gap from Thursday's 100.86 close would get filled, or something close to that.
We've seen pattern morphs left and right, so there was a chance that the Symmetrical Triangle would morph into a Channel or a Falling Wedge somewhere in the area of the neckline and the gap. Since GS has been performing so well lately, ignoring the lousy earnings that came out this week, I didn't want to get shut out of it so I bought 2,000 shares at 101.05 (second white arrow), despite the fact that I was buying "Ye Olde Knuckle-biter" because GS was back below the neckline.
Hindsight always is 20/20. When GS filled the gap, I thought, "Geez, ya coulda waited for that, ya dummy!" LOL. Easy to say, though, once we have the advantage of seeing what unfolds. It also "coulda" taken off to the upside without me ;)
GS filled the 100.86 gap, bottomed at 100.59, then rallied back above the neckline. It isn't fun sitting through "Ye Olde Knuckle-biter," but when there's a reason for it (in this case, filling the opening gap), I'll occasionally sit for it.
Another Inverse H&S breakout! Lovely. The earlier neckline break in the 5-minute chart was to go down and fill the gap, now The Bulls were ready to resume the rally. After sitting for "Ye Olde Knuckle-biter," I didn't want to see anything sloppy, back below this neckline. A penny or three back below the neckline, okay, but I didn't want the thing coming back in my face.
Git going!
Curses!
Thursday afternoon, I couldn't get a pullback to support to buy GS, now it was breaking neckline support for the SECOND time in Friday's session. No, thank you. I threw it in at 101.11.
It turns out that I threw in darned near the LOW on "Ye Olde Knuckle-biter," back below the neckline.
Curses!
GS rallied back out of the Inverse H&S, went into a Rising Channel (in yellow), then had another sloppy breakdown of the Rising Channel. If I had held my position, I would have sold that breakdown (yellow arrow).
Geez, sloppy...sloppy...sloppy.
I'll give The Bulls credit, though, for holding firm on that Channel breakdown and turning it into a Symmetrical Triangle (in green), then breaking out of it. There was only about ten minutes left on the clock when it broke out, so I had to pass on the breakout.
In the Hourly chart, The Bulls still have their Inverse H&S breakout.
Falling Wedges/Falling Channels often morph into Inverse H&S patterns. Interestingly, with all of the Inverse H&S patterns that we've had in the intraday charts, The Bulls have got a chance at breaking out of one in the daily chart. The putative Right Shoulder has some room to pull back some more, prior to any breakout.
At Friday's close, GS is parked right at the bottom rung of Kumo (Cloud) resistance, represented by the vertical red lines, which runs from 102.64 up to 114.765. That's daunting resistance, but if a stock is going to attack that kind of resistance, it's preferable for it to have established some kind of base from which to launch the rally, and "the bigger the base...the better the breakout."
This possible Inverse H&S base is of one month's duration, decent enough to attack that Kumo (Cloud) resistance if The Bulls can bring it.
Gain: $100 (Grumble...Grumble...Grumble)
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