(GOOGL) 30min - Bear Crab Type 1.5 / 3 Drives Top

This is an intriguing chart to me. Clearly the Bull Reciprocal AB=CD pattern, aided by the earnings announcement, yielded a major extreme impulse wave that met all of it's price targets. Price printed a counter-trend Bear Crab pattern and an entry confirmation line. Within a few bars, price quickly reacted to just beyond the Crab's .236 retrace level; completing the Type 1 harmonic reaction as it interacted with a mirror sliding parallel and a multi-pivot line. A rally to fresh highs ensued. Note the range of the rallies ever since the earnings announcement; their increasing, but the stock's essentially going nowhere. price had a small reaction back to the center line and has revealed the potential for a discordant 3 drives to the top pattern. Note the near touch and immediate reaction against the 1.13 extension of the last minor impulse, occurring at the upper Keltner Channel; this may prove to be the next major pivot. When stalking for a Type 1.5 harmonic pattern entry, one must consider the possibility of divergent action above the Type 1 pivot and be watchful for smaller time harmonic patterns to develop in the direction of the major pattern. There has been no minor pattern development, but the failed wave and discordant 3 drives pattern was enough for me to take this Type 1.5 bear entry. My contention is that we have a setup here that may yield a major impulse down; essentially filling in the earnings gap. However, the path downward is fraught with peril. For starters, price is currently locked in an upward sloping median line channel. It will have to contend with the channel's and several mirror sliding parallel's support along with the natural harmonic reaction level at the .236 retrace(purple dotted) and several multi-pivot lines(yellow dashed). The lower median line would be the next test of support. The longer any move downward takes, the more likely that price is, in fact, in an accumulation range; be mindful of the major median line set. The time element here is crucial for the bears as there is a Hurst nominal 10 day cycle low due within the time illustrated by the whisker(red line & circle). A move to target 2 would require a sharp decline if the next major low pivot is to coincide with the upcoming cycle low. If price eventually goes to target 2 in a protracted manner, it will do so in a volatile manner with sharp rallies. The harmonic trading model looks for a move to target 1 for a type 1.5 entry. I'll scale out there and hold the rest for target 2. The market will likely open with a gap. If it's to the upside, I'll no doubt get stopped out. If it's to the downside, breaking the minor pivot @131.89, then this trade is in business.

DYDD

Comment:

Price missed reaching target1 of this pattern by a hair. It instead traded just beyond the actual .382 retrace level and began to rally. I scaled out half of my position and will hold the rest in hopes that price will reach target2. I am now trend following with a dynamic stop just above the 1X3 Gann Angle(currently @ 131.84).