Goldman (GS) has had a rough 2011, down 50% at its low of 84.27 on October 4, when it reversed off a possible Bullish Wolfe Wave downside Fakeout/Breakdown (Black #5) and closed on a Bullish Engulfing candle.
At Monday's close, GS was poised to break out of the pattern, needing to take out the top of the pattern (Black #2-#4) at 97.08, then last Friday's high of 98.07.
GS opened yesterday Gap Down and was off two dollars, but it came right back and broke out, taking out both 97.08 and 98.07.
The stock rallied to 98.66, then broke below a little H&S Top (pattern in yellow). The Bears weren't doing much to knock it down, and after an upside breakout like GS had, H&S Tops often morph into a Falling Wedge or a Falling Channel (pattern in white). Connect the high of the Head and the high of the Right Shoulder for the upper trendline.
I bought 1,000 GS for 97.55 and sold them for 98.62-98.63, just below the session high of 98.66, to defend against a possible Double Top there.
GS went just a little bit higher (white arrow), to 98.8099, had a selloff, then traded sideways for the remainder of the session. The Bulls tried to stick the close above the 97.08 technical breakout, but failed.
That presents "Ye Olde Knuckle-Biter" to The Bulls since the technical breakout didn't hold on a closing basis. Earnings for GS are due out on October 18 according to Yahoo Finance.
Gain: $1,050
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