SHOP ‘Til You Drop? How the Darling of the Bull Sets Up

SHOP is the darling of the bull, rising from a low of 305 in March to 844 on May 26, where it left a large range Key Reversal Day.

This is a new 52 week high with a close below the prior day’s low.

As well, SHOP left a Gilligan sell signal on May 26.

A Gilligan is a gap up to a new 60 day high with a close at/near session lows.

It is a strategy I created in the mid 1990s that continues to do a good job of identifying exhaustion and Buying Climaxes.

SHOP’s signal reversal bar perpetuated its first test/undercut of its rising 20 day moving average since the March low.

While SHOP responded to its drop to the 20 day m.a.’s Holy Grail buy setup by “tailing” back up, it hasn’t challenged prior highs.

It remains caught between Dueling Banjo “tails” — one down, one up.

Be that as it may, SHOP’s drop last week established a 3 point trendline that may be the Neckline of a Head & Shoulders topping pattern.

If the Neckline is broken on trade below 730 that is sustained, it opens the door to potential to the 616 region.

With the 50 day line at 612 and rising, there is a possible Moving Average Pinball play on the table:

A solid break of the 20 day moving average could point to a test of the 50 day moving average in league with the aforesaid Head & Shoulders pattern.

Checking my Square of 9 Wheel to see how the technical patterns line up shows that a full 360 degree price cycle down from 844 is 730, which ties to the Neckline.

Another 360 degree decline points to 628 near the 50 day moving average.

844 is red
730 is blue
Green is 628

Too tin foil for your taste?

It may be of interest to know that SHOP’s 305 February 12 high was a square-out.

In other words, 305 is straight across and opposite Feb 12.

Red is 305
Green is February 12

Just as SHOP was a crash canary on February 12, as the darling of the rally off the March low, SHOP will be an important tell here.

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