GS came out of the gate at Friday's opening gong on a Gap Up to the top of the H&S Top (in orange). It filled the opening gap, scored two successive new highs on the morning, then tank...tank...tank. Yeesh.
We knew from yesterday morning's daily chart that the top of the Wolfe Wave/Falling Wedge came in at 94.86. The low of that selloff was 94.87 (red arrow), for a near-perfect validation of support at that trendline.
The problem with that was, however, that GS had to rally off that successful retest into immediate overhead resistance at the broken neckline (horizontal orange line) and, as the rally unfolded, it was a Bear Flag (in red). That setup favored The Bears to successfully defend the neckline and send GS back for some kind of retest of the 94.87 early session low.
The Bulls didn't defend their near-perfect early retest of the Wolfe Wave. The Bears busted GS down to 94.65, but then The Bulls came back and broke out of The Channel (in white), and were back above the top of the Wolfe Wave. Hm-m-m...
I bought 1,000 GS at 95.11 on the pullback to the EMAs, but they didn't provide support. Sloppy...sloppy...sloppy, but I held with a mental stop below the 94.65 low of The Channel.
Normally, I would be drooling over this morphed Triple Nested Channel breakout, like I was on Wednesday (LOL), but I wasn't best pleased with The Bulls' repeated retests of the top of the Wolfe Wave, so I used tight stops on the rally, raising my stop as GS went higher. The Triple nested Channel breakout put 96.35 IN PLAY
95.73 - High of the Channel
94.65 - Low of the Channel
95.73 - 94,65 = 1.08 points of upside on the breakout at 95.27.
95.27 + 1.08 = Target: 96.35 IN PLAY
These two higher stops (horizontal red lines) were very close to each other. Given the Bulls' sloppy performance, I didn't want to see any "lower lows" and was concerned that I'd have to sell into fast market conditions on the downside if they both got taken down. GS was half way to the 36.35 target, so I was content to sell when the higher stop (35.75) got busted.
The lower stop (35.63) held, and the target of 96.35 got MADE about ten minutes after I sold. Curses! LOL.
From Friday morning:
"Technically, GS still is broken out on a closing basis, but it theoretically could continue to "walk down" the upper trendline...down...down...down, but still would be broken out."
You see what I meant by that. GS still is broken out, but it hasn't done anything on the upside since the breakout and still is testing the top of the Wolfe Wave/Falling Wedge. That said, The Bulls are beautifully positioned for earnings if they can hold up here and if the company comes out with anything positive.
Gain: $1,200
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