AKS: More Broken Support

From February 2 on AKS:

KEY SUPPORT: 8.76-8.91

There's still possible support on a retest of the top of the Bull Flag (Purple Trendline #1-#3), which comes in today, February 3, at about 8.88. The top of the smaller Ascending Triangle (horizontal green line) also is right there, at 8.90-8.91, then there's the release of earnings low (Purple #4), at 8.76.

Bottom line: The Bulls need to CLOSE the stock back above the Big Ascending Triangle (Black Trendline #1-#3). Unless/until they do, the upside targets are not IN PLAY.

Update:

The AKS Bulls are digging themselves a hole here. 8.76-8.91 support is broken and the Release of Earnings 5% Gap Down Panic Low of 8.76 has been broken on a CLOSING basis. That "shouldn't" have gotten taken down.

The bottom of the 5-month Ascending Triangle (Black Trendline #2-#4) comes in today at 8.5565. That's next support. Yesterday's close was 8.54, so The AKS Bulls need to step it up coming out of the gate this morning and need to stop this "flush" to the downside by defending that trendline.

Everything from yesterday's 8.54 closing price, back up to Black Trendline #1-#3, which currently is at about 9.15, is resistance again. The Bulls need to CLOSE the stock back above there.

ARIA: Wolfe Wave Watch Update (2)

The ARIA Bulls weren't able to hold the upside breakout of the possible Bearish Wolfe Wave. The stock CLOSED back inside the pattern. That's a failed breakout, as it stands, so there's justification for The Bears to come in and short it, but they need to be mindful that there also was justification for shorting the Bearish Engulfing pattern, at Red #3, and that trade didn't work out. There's no problem with putting a short trade on in these situations; just be sure to cover the short if the market tells us that we've got it wrong.

Some technicians would say that yesterday's close is a CONFIRMED failed breakout. I don't consider anything to be confirmed until I've got some money jangling around in my jeanies. LOL. If ARIA goes down and breaks the bottom of the pattern (Red Trendline #2-#4) then gets anywhere near the target line (Red #6), then yes, it's a confirmed "Game, Set and Match" to The Bears on this particular pattern resolution.

The top of the pattern, Red Trendline #1-#3, comes in today, February 8, at 15.92. Should ARIA rally to there, within a penny or three, in the coming days, then falter, that would be additional information that at least a short-term top could be in. The slope of that trendline is +0.07250, so add that amount to today's 15.92 each session hereafter. It will be at 15.9925 on Thursday, February 9, etc.

It's helpful to look at intraday charts for clues about what's going on. For example, when The Bears shorted the Bearish Engulfing pattern, at Red #3...



...they knocked the stock down to roughly 15.37, establishing a neckline for a possible H&S Top. That looked very good for them and if they could have broken the neckline after a rally into a Right Shoulder, that would have put about a dollar of downside IN PLAY (that amount is the height of the putative H&S).

That isn't what happened. The red arrow "should have been" The Right Shoulder high, but The Bulls took that out to the upside, then more importantly, took out the 15.34 high of the Head (white down arrow) to the upside as well. Uh-oh...

That "shouldn't" happen. The Bulls got stronger, not weaker, and after they finally used the high of The Head as support (white up arrow), look out above! The short squeeze was on. The Bears had to Buy To Cover their mistake, at the breakout above the 15.34 high of The Head, and if they didn't, they got dragged almost to 16.00, and through the upside breakout of the Wolfe Wave in the daily chart.

The upside takeout of this H&S pattern in this hourly chart put about 16.34 IN PLAY because the height of the pattern is about a dollar and it broke out above 15.34. The chances of The Bulls getting to the 16.34 target, however, are somewhat diminished by the fact that The Bears CLOSED the stock back inside the Wolfe Wave pattern in the daily chart, but as we know, this stock has done some serious squeezing of The Bears in the past year.

Just laying out what I'm seeing here and trying to follow the action to see if I like something well enough to play it. Wolfe Waves "should" move rather quickly to the Wave #6 target, or thereabouts, after a Wave 5 Fakeout/Breakout, the latter of which certainly is a possibility given yesterday's close. The daily chart also looks stretched enough on the upside. It's been nearly a straight up affair off the 10.41 low, at Blue #4. A move down to/near the Wave #6 target line would be an entirely reasonable correction in the stock.

If anyone is interested in how this plays out and if I forget to post on it (I sometimes get interested in other stocks and don't follow it), remind me in the comment section sometime down the road ;)

ARIA And BXG

From Jan 30, on ARIA:

"In Friday's session, The ARIA Bulls came roaring back and took out Thursday's 15.15 high of the Bearish Engulfing pattern, but closed at 14.96, so Bears using a PRINT above Thursday's high were stopped out of their shorts. Bears using a CLOSE above Thursday's 15.15 high still are okay in their short position, but Friday's action certainly wasn't what they wanted to see."

That group of Bears also got stopped out of their shorts.

This stock has a penchant for squeezing the shorts pretty badly, especially during its stellar gain of 425% into the July, 2011 top, again in October, 2011, and again currently (review the charts from January 30th).

It's fine to have shorted that Bearish Engulfing Pattern at Red #3 of this current Bear Flag, playing it for a top, but "know when to fold 'em." That obviously was not a top.

Yesterday's breakout "could be" a Bearish Wolfe Wave 5 Breakout/Fakeout, which is a hallmark of a Bearish Wolfe Wave. The Bears got squeezed on Friday when ARIA closed at 15.48, above the high at Red #3, and they got squeezed again yesterday on the upside breakout of the pattern. Some Bulls bought the breakout, too, so the proverbial "everyone" was a buyer, and if it reverses to the downside, "everyone" was a buyer at the wrong time.

If it is a Wolfe Wave, they can be tricky. There sometimes is a Double Fakeout/Breakout where the stock goes back inside the pattern, breaks out again, then finally fails and reverses to the downside. My point is, have a stop loss so that it doesn't get out of hand on the upside. ARIA is making new highs here with no overhead resistance, which can be very dangerous for short positions.

Notice that after the breakout of the last possible Bearish Wolfe Wave, to Blue #5 and the question mark, there was no sign at all that it was a Fakeout/Breakout. It simply continued higher. Anyone who shorted the last pattern breakout, which was just below 13.00, has a problem here if they didn't cover it.

"Admit as quickly as possible when a trade goes wrong, take the hit, and move on."



BXG is a thinly traded stock that has had interesting price action since we looked at it in early January. The "Handle" part of the Cup & Handle pattern broke out in late December, 2011. The "Handle" is the Symmetrical Triangle, in blue.

The entire pattern had a couple of intraday breakouts that didn't hold on a CLOSING basis and the stock got sent down, all-ll the way back to the 2.50 low of the "Handle." Yeesh. That's a lousy performance out of the BXG Bulls ever to allow that kind of pullback, but they held at a low of 2.54, above the 2.50 Symmetrical Triangle low, and "they're baa-ack" near the top of the pattern.

A breakout suggests something slightly north of $4.00. The steady decline from the $4's in the first half of 2011 is resistance all the way up on a breakout, so this "extra" base-building here isn't all bad if the Bulls eventually can break it out.

It's certainly an unorthodox Cup & Handle! A takeout of 2.50 and 2.54 support would suggest a retest of the lows.

BIDU: Double Nested Inverse H&S

After the breakout of the Double Nested Inverse H&S pattern that we looked at earlier in the week (there's a self-contained Inverse H&S pattern in the Left Shoulder, in white), BIDU took off to the upside and headed toward the target of roughly 134 that went IN PLAY (For the target, take the height of the BIG pattern, roughly 7 points, then add that amount to the breakout point, roughly 127).

As we know, multiple patterns/nested patterns can pack some punch when they break out or break down, strictly based on the technicals, but any news on the fundamentals "can" trump the technicals. Watch the REACTION to the fundamentals. The inital reaction usually is an emotional, subjective response, and sometimes can be very misleading.

In this example, BIDU announced that the release of earnings would be delayed and reported at the end of February instead of at the end of January, which was when the market expected the report.

Uh-oh..."the market doesn't like uncertainty." The delay causes worry. "What's wrong?" "Why are they late?"

Anyone who didn't want the worry, and who sold, did fine. That's a nice play: "Gimme the money...I don't want the headache!" They caught some of the gain on the breakout, and BIDU did sell off on the news and retested the breakout. The Bulls got handed "Ye Olde Knuckle-biter" when BIDU sold off below the breakout, putting it's validity in question, but BIDU didn't tank, nor did it take out the low of the Right Shoulder, which would have been cause for more serious concern.

"Right Shoulder lows 'shouldn't' get taken down." (The reverse for H&S Tops).

Instead, the BIDU Bulls stood firm, just below the neckline of the Double Nested Inverse H&S neckline, while the "selling on disappointing news" transpired. They also used it as an opportunity to put in a Double Bottom, which they broke out of on Thursday morning, so they now had a Double Bottom breakout giving added strength to the initial breakout the Inverse H&S. There was a pullback to the Exponential Moving Averages (EMA's) after that breakout, then The Bulls rallied it to a new high on the session then left it parked at the close near the highs at the session, "poised to go higher" to the 134.00 target IN PLAY.

Friday morning was a Breakway Gap Up opening with very little gap fill. The BIDU Bulls stampeded to the upside and the (roughly) 134.00 target got MADE in a runaway.

The disappointment about the delay of the release of earnings only was temporary. There was no technical damage done the chart on the "bad news" selloff. It would have been a much better performance if they had held the neckline and NOT put players through "Ye Olde Knuckle-biter," so their scores get marked down for that, but The BIDU Bulls did score the 134.00, which the power-packing Double Nested Inverse H&S pattern had indicated, so there you have it.

Scores For Technical Merit:

10...10...10...10...10....10 (they got their target)

Scores For Artistic Performance:

5...5...5...5...5...5...5... (knock it off with "Ye Olde Knuckle-biter," dang it!)

AKS: Ye Olde Knuckle-Biter

From January 31, on AKS:

"As long as AKS holds the FOUR upside breakouts, it looks fine. If AKS should CLOSE below the big Ascending Triangle trendline (Black #1-#3), which currently is at about 9.18, that would be cause for concern..."

Well-ll...that's too bad. AKS closed at 9.04, below that trendline breakout of the big Ascending Triangle, so it's "Ye Olde Knuckle-biter" for the AKS Bulls, leaving them wondering whether or not they've got enough game to take the stock back above the breakout.

I bought AKS for 8.97 in mid-January when it went back below the breakout and retested the smaller Ascending Triagle (horizontal green line). That support held and it went back above the breakout again. At the release of earnings, AKS tanked 5% at the open, to Purple #4 of the Bull Flag, but CLOSED back above the Ascending Triangle, so I held it. I would have sold any close below Black Trendline #1-#3, regardless of what the earning were. I only look at the RESPONSE to earnings, and I liked that quick recovery on earnings day and the BIG up day on January 25.

But, now it's back below the breakout? No, thank you. That's too sloppy for my taste. That's enough of a concern for me that I don't want a position it, although I might trade in it later on.

KEY SUPPORT: 8.76-8.91

There's still possible support on a retest of the top of the Bull Flag (Purple Trendline #1-#3), which comes in today, February 3, at about 8.88. The top of the smaller Ascending Triangle (horizontal green line) also is right there, at 8.90-8.91, then there's the release of earnings low (Purple #4), at 8.76.

Bottom line: The Bulls need to CLOSE the stock back above the Big Ascending Triangle (Black Trendline #1-#3). Unless/until they do, the upside targets are not IN PLAY.




Purchased at 8.97.



Sold in after hours for 8.98-9.00 for a break even.

AMZN: Earnings

After successfully retesting the Falling Wedge breakout on January 13, AMZN broke out above the Ascending Triangle (in blue) to 195.94, came back and successfully retested the top of the Ascending Triangle, rallied to 196.50 and was parked just below there at the release of earnings.

As we know, the release of earnings always is a wild card. Anything can happen. In my view, the earnings don't matter; it's the REACTION to earnings that matters.

AMZN currently is called gap down, in the $174's, so it's obvious that the REACTION to the release of earnings is very poor. The $183's...$184's were Key Support since that was the Ascending Triangle breakout and the successful retest thereof. AMZN is getting whacked, well below that. The Gap Down also completes a Double Top, at 195.96 and 196.50, which puts a target of 170.46 IN PLAY, so AMZN almost will be there at the open.

Double Top:

195.94 - I use the more conservative of the two highs. Using 196.50 is fine.
183.20 - The pivot of the Double Top, or "M" Top

195.94 - 183.20 = 12.74 points of downside from the breakdown

183.20 - 12.74 = Target 170.46 IN PLAY

The $183's-$184's now are horizontal resistance again.