JC Penny Short Squeeze, Falling Wedge Pattern

JCP is desperate. The company needs to liquidate and downsize. If the company acts quickly and closes stores, this could help the few bulls still here and squeeze the shorts out of there money. As of Sept. 12 short interest was 32%. Third Quarter Earnings , Tuesday Morning 9:00 AM Nov. 19

Chart Pattern - Falling Wedge or Descending Triangle Pattern

The Falling Wedge is a bullish pattern that begins wide at the top and contracts as prices move lower. This price action forms a cone that slopes down as the reaction highs and reaction lows converge. In contrast to symmetrical triangles, which have no definitive slope and no bias, falling wedges definitely slope down and have a bullish bias. However, this bullish bias cannot be realized until a resistance breakout.

The falling wedge can also fit into the continuation category. As a continuation pattern, the falling wedge will still slope down, but the slope will be against the prevailing uptrend. As a reversal pattern, the falling wedge slopes down and with the prevailing trend. Regardless of the type (reversal or continuation), falling wedges are regarded as bullish patterns.

Prior Trend: To qualify as a reversal pattern, there must be a prior trend to reverse. Ideally, the falling wedge will form after an extended downtrend and mark the final low. The pattern usually forms over a 3-6 month period and the preceding downtrend should be at least 3 months old.

Upper Resistance Line: It takes at least two reaction highs to form the upper resistance line, ideally three. Each reaction high should be lower than the previous highs.

Lower Support Line: At least two reaction lows are required to form the lower support line. Each reaction low should be lower than the previous lows.

Contraction: The upper resistance line and lower support line converge to form a cone as the pattern matures. The reaction lows still penetrate the previous lows, but this penetration becomes shallower. Shallower lows indicate a decrease in selling pressure and create a lower support line with less negative slope than the upper resistance line.

Resistance Break: Bullish confirmation of the pattern does not come until the resistance line is broken in convincing fashion. It is sometimes prudent to wait for a break above the previous reaction high for further confirmation. Once resistance is broken, there can sometimes be a correction to test the new found support level .

Volume: While volume is not particularly important on rising wedges , it is an essential ingredient to confirm a falling wedge breakout. Without an expansion of volume , the breakout will lack conviction and be vulnerable to failure.


This chart was first pointed out by @Dmtz4444


Another look .. Fisher Cat with excellent divergence ... could tunnel in a wedge for a squeeze.
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Next divergence looking for deep OTM Call options.
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J. C. Penney Company, Inc.
First Trade Date (yyyy-mm-dd) 1946-01-08

Bullish timing > MidHeaven 12 Degrees 30' = Sagittarius Nov. 23 - Dec. 21 Look for New Moons, New Moon with Perigee, Lunar Eclipse when in Sagittarius, also look for a rare Pallas in Sagittarius

Bearish timing, events > when Mars and or Saturn is in Cancer, House 5 (very negative) June 21 - July 22

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QuantitativeExhaustion QuantitativeExhaustion
Missed one and it's very relevant this year. Mercury in Sagittarius in JCP Mid Heaven, 10th house. Mercury goes out of retrograde Nov. 09 before the planet enters Sagittarus on Nov. 23

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QuantitativeExhaustion QuantitativeExhaustion
Looked it up Dec. 04 Mercury in Sagittarius.
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Too many individuals agreeing. Any counter arguments out there??
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Hi JR, I appreciate your point of view and see this play in a similar way. As we see this falling wedge pull in tighter, where do you think it will end up before we see uptick in volume and a resurrection in SP. Thx for your input!
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Well we already have the uptick in volume. Possible we see the Squeeze on earnings day Nov. 19th
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QuantitativeExhaustion QuantitativeExhaustion

Looking at the triple divergence in progress. Chart indicators are really looking great here.
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looking at the monthly view,we have an overextended Fisher 100 and divergence, more then likely we will have a long term or short term bottom when we get a trigger on the Fisher 100
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