A Look at Gamestop and AMC…

Friday 2/5/21. Pattern Trading Setups for the Weekend.

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Here’s a symbol list of 123 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ALB, ADS, ABC, ANTM, AAPL, AMAT, BCPC, BZH, BBY, BIO, BLDR, CBT, CALM, CAL, CVX, CHS, CHD, CLX, CNO, CMTL, CLR, CSOD, COTY, CREE, CCRN, ^DJU, BOOM, EBAY, WIRE, XOM, EZPW, FDS, FAST, FLIR, FLS, FORM, FDP, GME, GNW, GPN, GPRO, HSC, HSII, HP, HNI, HURC, IEX, ITW, NSP, IIIN, INTC, IPAR, IPI, IVC, NVTA, JAZZ, JBLU, KMT, KFRC, KSS, KLIC, LB, LAMR, LANC, LDOS, L, MANH, MDCA, MRK, NBR, CNR, NEU, NI, JWN, OXY, OMC, OMI, OXM, PATK, PYPL, PLXS, PGR, PEG, PHM, QCOM, RGA, SMG, SIGI, SRE, SKX, SR, SXI, SCS, TXT, TREX, SLCA, UPS, VLO, WRB, WSO, WMB, DDM, IHF, IAT, IYZ, IYF, THD, PPA, PXJ, IXC, XLF, GLD, XLI, XAR, XLU, USO. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

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You can find setups based on a Fibonacci retrace by clicking on the link.

The following patterns were found manually, not using Patternz. Mr. Bulkowski has excluded any securities he owns from appearing in the list. However, he may add any of the securities listed to his portfolio at any time, just as you can.

There were 13 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 578 stocks searched, or 2.2%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 1 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 4 bullish chart patterns this week and 3 bearish ones with any remaining (7) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

For details about the chart patterns, click here.

— Thomas Bulkowski

Thursday 2/4/21. Intraday Market Direction: Nasdaq

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 208/367 or 56.7% of the time.

     The prediction of the index closing lower has been right 57/119 or 47.9% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

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I show a picture of the Nasdaq composite on the 5-minute scale.

I drew the red line under price at B. It shows support because the index bounced off the line three times.

Extending the line to the left, at A, shows support continues. The two red lines remind me of eyebrows.

Next came the V-shaped blue lines. Notice that the trend going down mirrors the slope going up. At the start, I drew a horizontal blue support line and then drew the one on the right. Label B
was in the way, so I drew it below B, completing the symmetry of the picture.

Other than eyebrows with a V-smile, I’m not sure what it all means. If we assume symmetry will continue, then the composite will lose 100 points (to 13,500) and go horizontal, resting on
the far left blue line to complete the picture.

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Here’s a symbol list of 90 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
DDD, AYI, AEIS, ATSG, AKAM, AA, DOX, AEO, ANIK, AMAT, ATO, AVA, BZH, BBBY, BKNG, BLDR, COG, CDNS, CHD, CLNE, CMTL, BOOM, WIRE, EFX, FEYE, FE, FMC, FORM, GME, GILD, GOOGL, HL, HD, HURC, INFN, IBP, IIIN, NVTA, KLAC, KLIC, LRCX, LDOS, LXU, MHO, MAN, MAS, MU, MUR, NBR, CNR, NFLX, ASGN, OMI, PRFT, PHM, QCOM, ROK, SCHW, SMG, SIGI, SSYS, TPR, TER, TEVA, TXN, TKR, TREX, VEEV, WSO, WERN, XLNX, IHE, QTEC, IYH, SLV, EWJ, EWP, THD, TUR, IBB, DBA, PXJ, PHO, XHB, XRT, USO, SMH. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

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The following table shows where Fibonacci retrace values of the day’s high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

— Thomas Bulkowski

Wednesday 2/3/21. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

The CPI turned bullish yesterday (two price bars back) after briefly turning bearish. Of course, the indicator can change its mind for up to a week, so we’ll have to see if the
bullish signal remains.

Today’s (Tuesday’s) move pulled the indicator up a lot, suggesting a broad advance across many stocks. Could this be the end of the downtrend? I wondered about that and thought of flipping
my targets (Tom’s Targets in the grid at page top) to bullish from bearish.

I decided to leave them alone in case this is a pause (upward retrace) in the downward trend.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Both lines are worse this week than they were at the same time a week ago. However, if you look at the chart, you’ll see the lines (blue and red) have curled up. That’s bullish.

So both charts this week are either outright bullish (CPI chart) or hinting of an upturn (this chart).

The big question is, will the uptrend continue? For that, I have no answer. Sorry.

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Here’s a symbol list of 82 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
AYI, ALL, AYX, AEO, BLL, BZH, BBBY, BIO, BRKS, BLDR, CHD, CIEN, CINF, CLF, CLX, CMTL, CROX, CCRN, DECK, DVN, DRQ, WIRE, EOG, EQT, XOM, FB, FE, GME, GS, HIG, HQY, HTLD, HL, HSII, HON, INFN, IIIN, IVC, JCOM, KELYA, KFRC, LAWS, LDOS, MHO, MRO, MA, NBR, CNR, NFLX, NJR, NXGN, JWN, OMI, PANW, POR, PHM, RMBS, RJF, RHI, CRM, SCS, SNPS, TECH, WSO, WDAY, ITB, IEO, FXI, ICF, IYZ, EEM, EWG, EWY, EWT, TUR, XHB, UNG, USO. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

— Thomas Bulkowski

Tuesday 2/2/21. GME and AMC Intraday

Weekly, since inception on 6/14/2011:

     The prediction of the index closing higher has been right 220/382 or 57.6% of the time.

     The prediction of the index closing lower has been right 41/86 or 47.7% of the time.

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I released a new version of Patternz (version 7.28). This version fixes bugs. After I released it this morning, I crashed the simulator.
Version 7.29 appears to fix it, so you can download that if you’ve already installed Patternz.

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Today, I thought I’d look at Gamestop (GME) and AMC (AMC) to see how easy/difficult it would be to make money trading them. Let’s look at Gamestop first.

This is the stock for the last 4 days on the 5 minute scale.

Last Tuesday, the stock closed at 147.98. You can just seen a nubbin of it on the chart (far left).

On Wednesday, the stock gapped up to open at 354.83, a gain of 140%. I show the horizontal blue line where it opened. At A, the stock peaked at a high of 380. Notice that if you bought
the stock at the open, you’d have a narrow window of opportunity to profit starting at A. For the rest of the day, you’d be losing money.

The next day, Thursday, you could buy the stock at the open, B, and ride the stock higher, much higher, to 483, representing a gain of 39% if you traded it perfectly. You had about 1.5 hours
to sell the stock for a profit. Most of the day was spent below the opening price.

On Friday, the blue line at C shows that you had less than 5 minutes (the opening bar) to sell the stock for a profit.

Today, Monday, the stock opened high and dropped steadily after 11:00.

Look at the entire chart and notice how buying at the open and trying to sell during the same day would most likely leave your wallet or purse lighter than when you started.
Also notice that the stock was higher at A than it closed today. That tells me the trend is downward.

AMC Intraday

Does AMC (AMC) stock show the same behavior? Let’s take a look.

This is AMC stock (one of those highlighted in the media over the last week) on the 5-minute scale.

If you bought at the open, at A, you’d have a loss. The next day, B, you would have fared better by having over half an hour to sell for a profit.

At C, the profit opportunity would happen just after noon but you’d have to weather a dip and sell when others were out to lunch.

Forget today (D). Buying at the open would result in a loss, riding the stock down from 17 to about 13, for a loss of 24%.

Trading AMC stock would not be an easy way to make money either. Of course, if you held onto the stock, you might be able to eke out a profit on succeeding days.

AMC shows a different trend. The last three days price has climbed (the open at D is higher than C, and C is higher than B), so it’s an upward trend.

Buying near the day’s low, if you’re lucky enough to do that and selling higher (especially the next day in AMC) would be profitable as would owning the stock before these shenanigans began.

The point I’m making here is trading these stocks to make money won’t be easy.

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Here’s a symbol list of 128 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
ACN, AMD, AA, AEE, AEL, AFG, AMWD, AMAT, AVA, BKNG, BAH, BRC, BRKS, CHD, CINF, CL, CMCO, CSOD, CREE, CRH, CROX, DVN, EMN, EMR, EIGI, EPAM, EQT, RE, FDS, FISV, FLIR, FTNT, GME, GPN, GS, GPRO, HSC, HIG, HL, HSII, HSY, IPG, ISRG, JKHY, JAZZ, JBLU, JNJ, KFRC, KBAL, KLAC, LZB, LLY, LXU, MRO, MA, MTRN, MDT, MLI, ^IXIC, NJR, NOC, PICO, PINC, ROG, RES, SAIC, SEE, SUM, UPS, WERN, WLK, ITA, IAI, IYC, IEO, DDM, QTEC, BOTZ, SOXX, SLV, IGE, EWA, EWO, EWK, ECH, EEM, EWQ, EWG, EIS, EWI, EWM, EWW, EPP, EWY, EWP, EWD, EWL, EWT, THD, TUR, EWU, QLD, PEJ, ROBO, IEV, IXN, ILF, SSO, MXI, XLY, XLF, XLI, XLB, SPY, XAR, UNG, USO, SMH, MGK. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

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The following table shows where Fibonacci retrace values of the day’s high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

— Thomas Bulkowski

Monday 2/1/21. Monthly Forecast Update

Forecast

Before I forget, I’ve created a new series of articles which I call Traps. I only have one written so far, but the category is meant to place chart patterns
in the price landscape to show what works and what doesn’t. The first article is The Top Trap. It describes when patterns fail after a top occurs. You can find
links to Traps on the home page, too.

Here’s the updated 2021 forecast for February, presented in slider format.

Based on sector performance from Fidelity, the best performing sectors for year to date performance as of 29 January 2021 were…
(The numbering is how they ranked a month ago.)

11. Energy (3.6%).

4. Health care (+1.3%)

9. Real estate (0.5%)

2. Consumer discretionary (+0.4%)

7. Utilities (-1.0%)

1. Information technology (-1.0%)

3. Communication services (-2.0%)

10. Financials (-2.0%)

5. Materials (-2.4%)

8. Industrials (-4.0%)

6. Consumer staples (-5.0%)

Compared to last year’s totals, where the list was stable from month to month, this time the list has been shuffled. That’s probably because it’s only been a month. Results are easier to change
after a month (YTD) compared to 12 months (YTD). Notice how a few near the bottom of last year’s list (energy, real estate) are near the top now.

Here’s how they rank the industries, but only the top 10 appear. Year to date returns. The numbering is how they ranked a month ago.

(new). Automobiles (13.6%)

6. Life sciences tools & Services (+7.3%)

(new). Household durables (5.2%)

(new). Oil, gas & consumable fuels (4.2%)

(new). Auto components (3.8%)

(new). Independent power and renewable electric producers (3.8%)

7. Semiconductors & semiconductor equipment (+2.4%)

(new). Biotechnology (+2.3%)

(new). Health care technology (+2.1%)

(new). Pharmaceuticals (+1.8%)

A Brief Look Back

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday: Down 36.98 points.

Tuesday: Down 22.96 points.

Wednesday: Down 633.87 points.

Thursday: Up 300.19 points.

Friday: Down 620.74 points.

For the Week…

The Dow industrials were down 1014.36 points or 3.3%.

The Nasdaq composite was down 472.37 points or 3.5%.

The S&P 500 index was down 127.23 points or 3.3%.

Year to Date…

Dow Industrials

     4.1% down from the high of 31,272.22 on 01/21/2021.

     0.4% up from the low of 29,856.30 on 01/29/2021.

Nasdaq

     4.8% down from the high of 13,728.98 on 01/25/2021.

     4.2% up from the low of 12,543.24 on 01/04/2021.

S&P 500

     4.0% down from the high of 3,870.90 on 01/26/2021.

     1.4% up from the low of 3,662.71 on 01/04/2021.

Options Expiration

No options expire this week.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, “Take a
two-dimensional approach.” He offers these tips.

• Seekinger doesn’t look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.
• S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.
• If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.
• In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.
• A move outside of daily R1 or S1 usually does not mean a breakout.
• The odds suggest that the entire week’s price action will remain between weekly R2 and S2.
• Avoid going long when the market moves above weekly R2 (it’s overbought) and avoid going short when price moves below weekly S2 (oversold).
• Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.
• Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) – L

First support level: S1 = (2 * P) – H)

Second resistance level: R2 = P + (R1 – S1)

Second support level: S2 = P – (R1 – S1)

H = high price , L=low price, C=closing price

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Here’s a symbol list of 124 chart and candlestick patterns (13 “investment grade” candle patterns) found in today’s securities using my version of Patternz:
AEIS, AKAM, ALKS, AEE, AIG, APA, ACGL, AVA, BMI, BAX, BIIB, BKNG, BAH, BRC, BBW, BLDR, CBT, CACI, CVX, CINF, CLX, CROX, CSGS, DVN, BOOM, EQT, RE, EXPD, EZPW, FLIR, FLS, GME, GD, GPN, GS, GFF, HLIT, HSC, HIG, HSII, HSY, HOLX, JBHT, IPI, ISRG, JKHY, JAZZ, KLIC, LHX, LZB, LANC, LLY, LNC, MTSI, M, MRO, MTRN, MDCA, MRK, MLI, NBR, CNR, NJR, NOC, NVDA, ORI, OLN, OTEX, PKE, PYPL, PICO, PNW, PPG, PINC, PEG, PHM, KWR, RMBS, SCHW, SEE, SCCO, STMP, TER, TKR, TRV, UGI, WEX, IEO, IHE, DDM, QTEC, BOTZ, IYH, IAT, SOXX, EWA, EWZ, EEM, EWH, EWJ, EWM, EWW, EPP, EWS, EWY, EWP, EWD, EWL, EWT, THD, EWU, PPA, IEV, ILF, VHT. Clink this link for details (pattern type, start and end dates).

For a list of small patterns (those a few days wide) click this link.

The below industries were the best (rank 1) or worst performing of those I follow.

— Thomas Bulkowski