SWHC will trigger a short entry on a break below this Ascending Broadening Wedge Pattern, which has formed following the recent breakdown of the stock’s primary uptrend line and subsequent bounce off support. T2 (6.18) is the current preferred & final swing target at this time. Stops TBD upon entry.
I’ll be heading out for a few hours this afternoon & just wanted to post an updated SPY chart before I leave. Yesterday’s gap down found prices opening right on the top of the wedge pattern, which was the second consecutive confirming candlestick to the potential Island Top reversal candlestick pattern on the SPY. No surprise that the market bounced immediately from the open yesterday as that was the first backtest of the wedge pattern since the overshoot and likely the last IMO. We’re starting to see the selling increase here a bit so far and we’re pretty much back to the top of the wedge as I type.
My expectation, assuming that my primary scenario does play out, is that Thursday’s “Island” gap up in the SPY was likely a significant top. However, there’s still quite a bit of work to do on the charts, starting with prices moving impulsively back into and ultimately below the bottom of the wedge. The blue horizontal line is analogous to the 1470-1475 level on the $SPX, which is my initial downside target. Best to continue to keep things light for now and either trail up stops on existing longs in order to protect gains or book partial or full profits as the early targets are hit. More aggressive traders or those comfortable with shorting can find plenty of short setups and active short trades offering objective entries around current levels. Regardless of the “trend that just won’t end”, the risk/reward on the long side remains unfavorable at this point. Updated $SPX daily chart shown.
On the last update to the HLF short trade, I had pointed out this triangle pattern on a 120-minute time frame chart stating that a downside resolution to the pattern was likely. Prices have indeed recently broken to the downside and I have added one additional key support level to watch as shown on this 60 minute chart.
My thoughts on HLF continue to be that there is a good chance, contrary to the widely held consensus on Wall Street, that Carl Icahn’s short-squeeze plan, which relies primary on the use of options, might backfire on him. If so, the unwinding of his positions, coupled with both natural and new short-selling of HLF shares, could be the recipe for a very powerful move down in the stock. This is pure speculation and I must reiterate that this is a very aggressive trade that could move sharply in either direction at any time so as always, DYODD and trade (or don’t trade) according to your own risk tolerance, trading style and objectives. T3 (31.30), which can be viewed on the recently posted daily charts, remains my final and preferred target for now but additional target may be added to this trade soon. As of now, suggested stops remain on a solid move above the top of this pattern.
The AAPL long trade has hit the first profit target for a 4.3% gain from the official entry and a 5.7% gain from the optional (early) entry posted on March 11th. Consider booking partial or full profits and/or raising stops, according to your trading plan. T2 (482.50) is still the final target at this time although additional targets may be added if AAPL can convincingly break above the primary (orange) downtrend line, which is also the top of the channel shown on the recently posted daily charts.