PCLN Update

Thus far I'm very happy with PCLN and if possible my plans as of now are to open a trading short (equity) and/or filling out the core short position, this is in addition to the PCLN puts just entered, that's a lot of exposure to PCLN, I hope none of you have that much, but they are 3 very different positions (Puts for ultra-short moves with momentum), a trading position for a swing like move, or the first leg before a correction and the core position is a trend trade meant to last quite a while.

The reason I will wait if possible is that there are a lot of retail games in the morning and you really don't get a true sense of the market until the pros step in toward the late afternoon and more importantly, who knows what happens after 2 p.m. with price, I'm not concerned with 3C after 2 p.m. although I'll be watching it before making any move, but price after 2 pm when the op-ex pin is released can be pretty random at times, it holds almost no analytical value (the 3C charts in to the close hold a lot of value), but perhaps a price move after 2 p.m. may give me a better position or I'll have a clearer view.

The only reason I may not be able to wait until then is if it looks like there's an imminent break coming and I can't wait.

Here's today's update, I'm not covering the full PCLN analysis as there are a lot of posts already covering the long charts and full analysis.

 You  may recall me saying I was "Interested in adding to PCLN, but would not until PCLN broke above $1100".

At the time PCLN was below $100 and in a downtrend/channel, why would I say such a thing when there was no apparent price reason to think a move above $1100 was likely?

It's simple market behavior or psychology 101, $1100 is a whole number, it's a centennial number and that makes it a magnet for limit orders and longs buying on confirmation breakouts >$1100, so it's a magnet of sorts and it's an asset for smart money who either wants to dump shares, make a trade or start/fill out a short position.

Above $1100 and you get volume, demand which they need to sell / short in to and of course better prices as well as the volume rebates, the spread and all kinds of other small items that add up to big profits.

The 2-day ATR is fading as you can see and after the initial rounding top at #1 you may recall me saying it made too clean a line of resistance, it will be a magnet so a move above that was highly probable as all of these concepts are scalable from a daily chart to intraday to weekly or monthly charts because emotion drives them all as well as the same concepts.

At #2 we are getting another rounding top as I'd like to see, but even better is #1 ans #2 taken together to give a larger rounding top that is commensurate with the suspected head fake move above $1100. I say suspected because in truth this head fake move would be a "Failed breakout" which can move down very quickly, but until it does, it's suspected based on the way 3C acts in the area, the actual "Broad term for many different types of these moves), "head fake" refers to the actual process in which the bulls are trapped and that means price below $1100.

 10 min chart and the VERY obvious $110 level and the very obvious 3C action above $110 suggests the probabilities are very high that this is a head fake move or will turn in to a failed breakout.

Intraday the 1 min chart looks great, I showed this yesterday and it's even better today as well as PCLN's relative underperformance against the rest of the market/averages.

The white area is the accumulation for the move above the first rounding top as it made a clear straight line resistance zone that is an attractive area for limit orders. However, it's a very small accumulation zone so it's not likely to support much more than we've already seen.

 2 min chart is similar, the accumulation for the move above $1100 is larger, but still fairly small being a 2 minute chart, it's about what I'd expect considering the move since, no surprises there, The 3C action above $1100 is clear and this is why I say this is a very high probability head fake move because it appears it's being used for the exact reasons they run such a move, distribution, whether selling longs or selling short.

Note the accumulation area had a head fake stop run just before it launched allowing them to pick up supply at cheap levels, this is why these moves are often such good timing markers as they tend to just precede the actual reversal.

 3 min chart shows there was never any confirmation of the move above $1100, there just wasn't enough strength to register on the stronger timeframe. At #1 we have distribution creating the down channel and #2 the $1100 zone, #3 is normal downside confirmation, #4 is the breakout above $1100 and #5 is non-confirmation of the breakout move, another sign of a failed breakout which is one version of a head fake as Head fake is a broad term encompassing many different traps both bullish and bearish as you can see in PCLN alone (head fake at accumulation and at the breakout).

The only interesting feature technically in price today is a bear flag intraday, it's typical that these are manipulated so instead of the break lower from the flag intraday, they would typically break it higher, although it's a very small price pattern, but this is the reason I prefer to try to wait toward the EOD.