ICE Cup n' Handle

ICE looks ready to break out of a 4 month cup n' handle early next week after ICE said that they "decided over the weekend it wasn't worth trying to pay more for the CBOT (BOT) given the Merc's (CME) edge and its increased offer." Fears of a bidding war (which turned out to be warranted) ended a huge rally in ICE last winter and effectively formed a perfect looking pattern. I think ICE will breakout easy and the volume will confirm but if you want to be conservative I'd wait for $162.50 to be surpassed (don't be surprised if ICE gaps up there). Based on the measured rule for this pattern the target is $210.

Another chart I came across this weekend was what looks like a rising wedge in the Semiconductor Holders ETF with ticker SMH. This fund is comprised of the leading semiconductor companies and lately it has been outperforming. However, the rising wedge is typically considered bearish and based on Bulkowski's statistics it leads to a downward breakout 69% of the time. This pattern must breakout out up or down next week as the wedge will come to a point by then. See Bulkowski's site for more info.


And now a few other noteworthy points on previously mentioned stocks. As I suspected, CCRT did breakdown nicely last week on strong volume and looks to continue lower. If you missed the breakdown, CCRT looks like it may do a throwback so you may be able to enter shorts around $34.50. SWKS scheduled their 3Q earnings release for July 18th, recall I am expecting positive results based on the chart breakout, recent results and the iPhone. AHM shorts still look good. I think profit taking on JASO would be prudent here. WFR continues to trade in a channel about it's 50 dma. Finally, a significant correction in DECK must be near with it's weekly RSI at 92.42, thats the highest (most overbought) I have ever seen.

As always, please remember that you are responsible for your own trades and investments. This blog is not intended to be financial advice but rather some thoughts that I or the other contributors have on the market. Trading stocks and especially options can lead to catastrophic loss of capital, please be safe.

Disclosure: I own SWKS calls, AHM puts and DECK puts.