Classic Bottom and Breakdown Patterns

A little trade review here today into the close.  I put on two swing trades today, a long in $GS and a short in $LVS.  Both are classic patterns with low risk entries, let’s review.

This is a classic bottoming pattern in Goldman Sachs $GS.  On the chart you will see that the mid December lows did undercut those from early December, but what you won’t see is that momentum indicators produced a significant divergence.  Excuse me for not posting the chart with the MACD on there, you can go and scope it out for yourself.  The downtrend line seen here was broken on the 21st which produced a test of the 20 day moving average.  The test failed, and we came back down to test the downtrend line from above, a classic technical pattern.  That test held, the 5 day moving average turned up, and $GS was on its way.  Everyone and their mother was watching that 20 day moving average today, i took my position before the break with limited risk as my stop was placed under yesterday’s low.  The 20 day broke, $GS surged, and came back down to retest that level.  This was another opportunity to get long with limited risk, it held and we are now off to the races again.  Look for 68$ and the 70$ as targets to peel off some of your position if you’re in this trade.

Las Vegas Sands $LVS is trapped in a classic breakdown pattern, a descending triangle.  15$ is the major level of support here.  We’ve seen multiple failed tests of the downtrend line over the last few weeks, followed by a failed test of the declining 20 day moving average.  I took my short position in $LVS today at 15.02, with a tight stop above yesterday’s high.  This one is coiled up tight and is going to break hard.  I’ll be covering very quickly on any move downward as patterns like this have been getting squeezed big time after their resolution recently.

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