Four Actionable Price Patterns
more day-to-day volatility this week is expected , where the Dow Jones might go be up 100 points one day and down 100 points the very next day . Our “friends” at the Federal Reserve will add to the volatility, when they make their statement on interest rates
we are trading with both bullish and bearish positions with an overall balanced outlook in this market climate. But we’re generally using smaller position sizes and tighter stops . When looking for bullish ideas, we’re searching for one of two characteristics: relative strength or identifiable bottoms. When looking for bearish ideas, we’re searching for well-defined bearish trends that are about to continue.
Cleveland Cliffs (CLF) – Bullish Wedge
CLF is tracing a big bullish wedge. The pattern is about six months old, but may need a few more months before it breaks. Horizontal resistance is well-defined at $105.
QLogic (QLGC) – 123 Bottom / Bullish Flag
Semiconductor stocks have been absolutely hammered in the bear market. The group is oversold. But some stocks within the semi sector are showing signs of life. QLGC is one such stock.
QLGC has a 123 bottom if it can stay above $12. This bullish reversal pattern has formed over six months. In the short-term, the stock has formed a bullish flag. Look for a break above $14.50 to confirm the flag and a move above $16 to confirm the 123 bottom.
Goldman Sachs (GS) – Bearish Channel
It’s been a while since we are writing about GS. We still think that the stock is important in the broader market.
The stock still hasn’t reached its bearish price target of $150, which is very close to its August low. We’re going to keep looking for GS to fall as long as it is staying in its bearish channel. But if GS breaks out, to the upside, from its bearish channel, it’s likely that the stock will continue to trend much higher. You could even argue that such a breakout would turn the bearish channel into a short-term bullish flag.
The set-up in GS is a good one to watch Wednesday, after the Fed announcement.
Intercontinental Exchange (ICE) – Bearish Flag
The news of merger talks between the CME and NYMEX could put further pressure on ICE. A very short-term bearish flag has formed in the stock which, if broken, could send it back down to recent lows in a hurry.
