I removed my stop loss at 193.38 due to the fact that I still believe the indexes are at a top to this rally. I believe the NAZ is just testing the all-time high weekly close at 5048 and having closed on Friday at 5029, the possibilities are high that at the very least the index will back off from this level, meaning all stocks will back off from this level
I will keep you abreast of what I do, but for now I am still short the stock.
GS has now gone below yesterday's low and that makes yesterday's high at 192.49 into a successful retest of the 191.95-192.68 resistance level. It does put one more nail in the coffin, strengthening the chart for the correction I have been expecting to see.
I added shorts here at 191.85. I am now averaged short at 189.63 (2 mentions). Stop loss remains at 193.38.
After last week's action I did expect the stock to get up to somewhere between 191.98 and 192.68 and it can be said that already occurred with this mornings 191.95 high.
GS generated a positive reversal, having made a new 4-week spike low and then closing in the green and in the upper half of the week’s trading range, suggesting further upside above last week’s high at 190.00 will be seen this week. Nonetheless, the stock ran into some selling interest on Friday when the stock failed to follow through on Thursday’s rally and close at 189.95 and got down to 186.16, opening the door for some doubts to emerge as to the strength of the rally to 190.00. Decent resistance will be found between 191.40 and 193.28 that seems unlikely to be broken, at least without the help of a resumption in the uptrend in the indexes. Minor intra-week support is found at 185.59 and decent between 182.40 and 182.79. Probabilities favor a rally up to around the 191.90 level but also favor a drop down to 185.99. Overall, the probabilities still the stock being in the process of building a top formation from which a strong correction can occur.
FSLR followed through to the downside and did close below the $60 demilitarized zone, suggesting that the stock will see 57.80 before any new buying is seen. The 200-day MA is currently at 57.70, so it is a viable downside objective. I will consider adding positions at that point.
Market has negated yesterday's rally and today has now gone below last week's low, suggesting that the selling has resumed.
I am now short not only GS, but AXP, COF, KMX, ORCL OSK, and TOL and all in profit. All of these shorts were given to my subscribers over the past 2 weeks.
In addition, I took profits on my long positions on QRVO, AMZN and PACB.
Then please answer the question as to why GS has not been able to get above the $200 level for the past 8 years even though the indexes have made new highs over and over again.
Your thinking does not make sense.
Per my newsletter mention, I shorted GS today at 187.41. Stop loss is at 193.38 and objective is the $150-$155 level. I am risking approximately $600 to pick up $2200-2700, which is a 3.5-1 risk/reward ratio.
By the way, in an answer to chedche88 that says that unless the stock breaks $170 that the bulls remain in control. That is certainly true but then again this market has not given the bears any trends, meaning that waiting for the $170 level to break means you would be "chasing" the stock and chasing most stocks to the downside has not worked since 2008.
The trading idea is to sell high and buy low and more importantly to get involved when there are at least some reasons to get involved, such as the successful retest of the December high at 198.00. The idea then becomes to use good risk/reward ratios to keep the winners giving more profits than the losers giving losses. If you make more than you lose consistently, you will end up a winner at the end of the year.
Anyhow, I believe this is a viable short position at this price.
Per my newsletter mention, I shorted TOL today at 37.24. Stop loss is at 39.35 and objective is 30.00. I am risking $211 to pick $724 per 100 shares, which is a 3.4-1 risk/reward ratio.
TOL Friday Closing Price - 36.92
TOL has been trading mostly sideways between $30 and $40 for the past 29 months but it is important to note that the stock made a new 9-year high at 39.95 in March of last year and a new 27-month low at 28.92 in October of last year, suggesting the traders are sensing the stock may be ready to break out or break down out of that trading range sometime in the near future. Nonetheless, for the time being and considering that the indexes are likely heading lower, it does seem that at the very least the stock will be heading back down to the $30 level, which is also where the 200-week MA is currently at.
TOL generated a red weekly close on Friday, making the previous week's close at 38.31 into a successful retest of the 9-year high weekly close at 39.22. The stock closed on the lows of the week and further downside below last week's low at 36.62 is likely to be seen this week.
TOL bulls have now failed to break the top of the sideways trend and as such, the probabilities strongly favor testing the bottom of the sideways trend at the $30 level, especially since the stock shows multiple daily closes (4) between 30.44 and 30.91 as well as around the 28.40-28.92 that are now highly likely to be a magnet for the traders, given that the indexes may have found a top to their rally.
To the upside, TOL shows intra-week resistance at 37.10, at 38.36 and at 39.08. Further resistance is found at 39.95 but if the 39.08 level is broken, it is likely the stock will get above 40.00. To the downside, the stock shows no support until minor support is found at 34.50. Further support is found at 33.26, a bit stronger at 32.34, and again at 30.81, that does include the 200-week MA, currently at 30.20. Strong support is found at 28.92.
Sales of TOL between 37.00 and 37.50 and having a downside objective of at least $30 will offer a 3-1 risk/reward ratio.
My rating on the trade is a 4 (on a scale of 1-5 with 5 being the highest).
GS Friday Closing Price - 186.91
GS has built a bearish Head & Shoulders formation over the past 7 months with the left shoulder at 189.50, the head at 198.06 and the right shoulder at the high seen 2 weeks ago at 193.28. The neckline is presently around 172.32. A break of the neckline would offer a $155 objective.
GS also now shows 2 successful retests of the 7-year high at 198.06 (seen the first week of December) with the first successful retest being seen the last week of December at 196.96 and the second one being the high seen 2 weeks ago at 193.28, meaning that the bulls have now done everything they could to re-generate the uptrend but failed.
GS generated a reversal day on Friday, having gone above Thursday's high and then closing below Thursday's low and on the lows of the day/week, suggesting further downside below last week's low at 186.56 is likely to be seen this week.
To the upside, GS shows minor to perhaps decent intra-week resistance at Friday's high at 191.40, a bit stronger between 192.68 and 192.87, and decent at 193.28. Nonetheless, on a daily closing basis, the 187.89 to 188.07 level will now be considered decent resistance. To the downside, the stock shows very minor support at 185.59, minor to perhaps decent at 182.40, minor but psychological at the 180.00 demilitarized zone and decent as well as pivotal between 171.26 and 172.32 (neckline of the H&S formation). Below that level, there is very little support until the $150-$151 level is reached.
The probabilities now favor the stock heading back down to the $150 level that has offered the same kind of support over the past 7 years as the $200 level has offered resistance during that same period of time.
Sales of GS above 187.50 and using a stop loss at 193.38 and having a $151 objective will offer a 4-1 risk/reward ratio.
My rating on the trade is a 4 (on a scale of 1-5 with 5 being the highest).
FSLR generated the 5th green weekly closing in a row but more importantly confirmed the break of the 50-week MA, currently at 59.00, with a second close in a row above the line. The stock closed in the middle of the week's trading range, suggesting the stock might follow whatever the market or oil prices do this week. Nonetheless, the stock did generate a negative key reversal on the daily chart on Friday, having made a new 6-month high and then closing below the previous day's low, suggesting the first course of action for the week will be to the downside. Minor support is found at 60.15 and decent as well as pivotal support is found at 57.80, which is also where the 200-day MA is located. Probabilities favor a pause-in-the-uptrend week, a drop below last week's low at 59.03, but a close next Friday above that same level. A rally above last week's high at 62.27 would likely negate the scenario, suggesting 65.99 will be seen.
Based on the chart picture, the $100 objective is a valid one. I too have stated in the past the stock would be going to $100. Nonetheless, the time period is purely speculative, though possible.
The shorter term picture calls for the stock moving up to the 65.89 level (at least 64.19 on a weekly closing basis) and then likely dropping back down to at least 57.80, though there is a slim possibility the stock could revisit the $50 level, if and when oil makes a new low below 43.50 as some analysts have speculated will occur.
Whichever low is seen is likely to determine the time frame. A drop down to the $50 level would tend to keep the stock under wraps for a longer period of time than a drop back down to 57.80.
Either way, the chart does suggest that ultimately the big break that occurred in October 2008 when the stock broke the $100 level will be tested.
FSLR bulls were able to get above the minor resistance around the 60.30 level. The stock closed on the highs of the day and further upside above today's high at 61.21 is likely to be seen tomorrow. There is no resistance above until 65.99 is reached, so the stock could run up another $4 this week.
FSLR received a better than expected earnings report and generated a strong spike up week, as well as a close on the highs of the week, suggesting further upside above last week’s high at 60.21 will be seen this week. The bulls did accomplish a lot this week, having closed above the 200-day MA on Wednesday and the break was confirmed with 2 subsequent green daily closes on Thursday and Friday. In addition, the stock closed above the 50-week MA, currently at 59.15, also suggesting further upside will be seen. General resistance is found at the $60 demilitarized zone, minor to perhaps decent intra-week resistance is found at 65.99 and then nothing until minor between 66.68 and 66.88. Support is now found between 57.60 57.80 that is now likely pivotal on a daily closing basis as that is where the 200-day MA is currently located. Probabilities favor the bulls for at least a rally up to the 65.99 level.
I think you are wrong.
First of all, with today's rally above yesterday's high, in spite of the close on the lows of the day yesterday, the bulls are showing they have a lot of ammunition to keep the stock heading higher. It should also be noted that yesterday's high of the day was just a few points above the 200-day MA, currently at 57.75, and that was was generated the late day sell off yesterday's afternoon. The stock is now trading above the 200-day MA and that is a "bullish" statement. If the stock closes above the line today and confirms the close with another close above the line tomorrow, the resistance at 59.78 (58.90 on a daily closing basis) will likely be broken and a rally up to 65.98 likely seen.
In addition, and probably even more important, the stock is showing a major island formation (very rare) with the stock gapping down on November 7th between 55.80 and 53.48 and the stock gapped up yesterday between 49.97 and 54.43. Both gaps came off of earnings reports and that makes it even more importance since gaps of this type off of "news" are usually valid.
Yesterday, especially after the stock sold off and closed near the lows of the day, I did expect the stock to get down to either 53.97 (intra-week low seen on October 27th), 53.48 (gap high on November 7th) or even down to 52.42 (important low seen on March 12th of last year). Never was a drop back down to the $50 a real possibility after the bullish earnings report.
All of those potential lows are still viable but now after today's rally, much less probable, in fact now only a slim possibility.
The key now is 59.78. If that level gets broken, further upside will be seen.
FSLR bears failed to generate any follow through to the downside and have generated a rally above yesterday's high and above the 200-day MA, currently at 57.75. If they can maintain the stock up here and close above the line and confirm that again tomorrow, the bulls would gain some ammunition. Nonetheless, the 50-week MA, currently at 59.15, would be the next obstacle to overcome and that line has proven to be reliable resistance and support. The bulls would need to also get above the 4-month high at 59.78. Nonetheless, if the bulls are successful in doing all of that, it should generate a rally up to 65.98.
Thanks for the thoughtful and well written reply.
I want to respond to your response that my original post was not "facts":
The NASDAQ bulls are on a mission and that is to test the all-time intra-week or weekly closing high at 5132/5048 respectively. (the bulls are not on a mission?) There seem to be no obstacles to that occurring this week, at least not until the FOMC minutes come out on Wednesday (what obstacles are there for the index to move up another 150-200 points?). Nonetheless, the FOMC minutes are a possible “monkey wrench” since the probabilities now are becoming high that the Fed will start mentioning raising rates sooner rather than later because of the improving economy (the Fed has stated that at some point in the near future they will raise interest rates, only question is when). That would put a big damper on this rally (higher interest rates would be a damper on the market since we have seen no interest rates for close to 6 years). As such, the probabilities strongly favor a strong run in the index on Monday and Tuesday.
Last week, the DOW rallied 1%, the SPX 2% and the NAZ 3% (all fact). If those percentages are mimicked again this week, it will place the DOW at 18199, the SPX at 2137 and the DOW at 5039. As such, those numbers all make sense as this week's objectives.
One thing though, the probabilities of the NASDAQ going "above" the all-time high are (in my opinion) next to zero (not fact, just opinion), meaning that if the bulls accomplish all of that this week, there will be little ammunition left to accomplish anything more, perhaps for the rest of the year (at least until October) (opinion once again). Simply stated, the top of this up-trend could be seen this week.
"uncertain language never embedded in stone".
Let me ask you a couple of question:
1) Does anyone know "for sure" what is going to happen?
2) If someone said something "embedded in stone". would you believe it and invest off of it?
Let me clarify something, I am a chart reader (look at the charts and try to interpret what the say) and I come up with probability numbers based on the situation. Much like a manager of a baseball club that needs to make a pitching change. Should he send the lefty pitcher because the person batting is a lefty? Should he send a strike out pitcher because the guy batting is a good hitter but strikes out a lot? Should he send a specialist just for this batter and then change pitchers again? The manager does not know what the answer is but he makes a decision based on the probability numbers. If the manager is good, his calls will turn out to be the right ones more often than not! That is what I do with 37 years of experience in charting. I do not KNOW what is going to happen for sure but I play the probabilities!!!
Would you rather have someone that his decisions are always embedded in stone? or someone that thinks on his feet and sees the probabilities clearly?
Just out of curiosity. Someone gave a thumbs down on my post and I would like to know why.
The post is not really an opinion but simply chart "facts". As such, are you saying information is a negative?