QuantitativeExhaustion
Long

JC Penny Short Squeeze, Falling Wedge Pattern

NYSE:JCP   PENNEY J C INC
2713 39 29
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.

stockcharts.com

This chart was first pointed out by @Dmtz4444
Thomas Graves
3 years ago
I think this could be a good play in several weeks.
+1 Reply
QuantitativeExhaustion PRO Thomas Graves
3 years ago
Thanks! Here is a look at the dual Fisher (34,100) on the two-day chart. As you can see we have a long trending divergence. Two-Daycharts work really well filtering out noise and help you see the big picture.
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HaveSkill
3 years ago
looks like the main move is already over
+1 Reply
HaveSkill
3 years ago
cancel that last one
+1 Reply
StealthTrader
3 years ago
Great Work
+1 Reply
QuantitativeExhaustion PRO StealthTrader
3 years ago
Applying the Guppy MMA

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Need to see compression on daily charts. Trend is still slightly bearish.
+2 Reply
nmike MOD
3 years ago
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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+2 Reply
Good read @nmike 2Day-to-1Month+ are all showing divergence.
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Also looking at ADX compared to MACD. We are getting close to converging/conforming pattern ADX (rising +20), while MACD is moving holding steady. Watching weekly chart and 2 day chart to see a signal crossover.

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Judging by the 2 Day chart we still have time before going long JCP. If JCP shows convergence on dual fisher 2 Day, all bets are off and we could go much further lower.

+2 Reply
Waiting on that monthly candlestick duo to develop?
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nmike MOD QuantitativeExhaustion
3 years ago
@JR, monthly candle stick action suggest further downside
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+1 Reply
Yep, looks like we will close below previous low 12.12.
+2 Reply
What does your weekly chart look like? -- If we know the target is $8.35 (or somewhere between $8.30 and $13.50), and we use weekly chart to measure descending support line.

A bit difficult to define a descending wedge pattern with monthly time frame
+2 Reply
nmike MOD QuantitativeExhaustion
3 years ago
to bottom trend line near term, Trix bar getting longer this week so far
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+1 Reply
Stopped the leak. Looks like 8.35 area could be the ultimate bottom. We could probably start looking/awaiting the smaller time frame divergent signals. Probably look at those candlestick formations as well.
+2 Reply
DanV MOD
3 years ago
I have been following this for some time now and waiting for potential bottom which is further down, 10 area may be. However, looking at Monthly chart, I think it looks even more interesting. Namely if this is wave 4 bottom, this stock could retest all time high and even post new high in next 12 months. Here is the chart
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+1 Reply
You got this one right.
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DanV MOD QuantitativeExhaustion
3 years ago
Thanks, I think some sort of major stops could be taken out below that major low by minor breach on some spike may be. So still keeping an eye on that.
+1 Reply
Talked to another TV member who bought on divergence indication. Already hit his stop today.
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DanV MOD
3 years ago
Looking at it closely on Daily chart - you can see we are in final leg down to complete the low for this wedge which I think is an Ending Diagonal. That could be extremely bullish.
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+1 Reply
I suppose we could call this a truncated fifth wave (failure) if my prediction that we narrowly trade in range between now and end of October.
+2 Reply
QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
Knowing that 5th wave failures to the upside = fast corrections to the downside. The opposite applies here. Truncated 5th Wave narrow bottom = fast correction to the upside.
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DanV MOD
3 years ago
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I like it. Not so sure we go as low as you think. Looking like we stay in a narrow range between 12.20 and 13.30. Any breakout above descending wedge resistance and we're off to the races, 21+.
+2 Reply
smell of monster squeeze must be potent. Seeing a few articles already predicting a squeeze by years end.
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Proxy
3 years ago
This looks good! I look forward to develop on this.

Entry on another drop before mid-Nov., or right after or before the quarter-earning report, and then comes Black Friday and Christmas season for deep ITM. Just needed this in dark mode first. ;]

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+1 Reply
So do we think Earnings will be the catalyst or will JCP sales data on Black Friday?
+2 Reply
Broke support at previous 52 week low $12.12
Divergences still intact.
+2 Reply
Themarlin
3 years ago
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!
+2 Reply
QuantitativeExhaustion PRO Themarlin
3 years ago
Well we already have the uptick in volume. Possible we see the Squeeze on earnings day Nov. 19th
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
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Looking at the triple divergence in progress. Chart indicators are really looking great here.
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Too many individuals agreeing. Any counter arguments out there??
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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

http://www.stockmarketcompass.com/spx_firsttradedates/jcp.htm
+2 Reply
QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
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

http://astrotheme.com/chart/ZQtjZGR5AQLjBGZjZQNjZQRkZQNkBGR2AmZ.png
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
Looked it up Dec. 04 Mercury in Sagittarius.
+2 Reply
BizkitBR PRO
3 years ago
great info with the chart!! thanks
+1 Reply
QuantitativeExhaustion PRO BizkitBR
3 years ago
No problem. If you notice anything particular with a JCP chart, go ahead and post it here.
+2 Reply
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Next divergence looking for deep OTM Call options.
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Another look .. Fisher Cat with excellent divergence ... could tunnel in a wedge for a squeeze.
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VolHunter
2 years ago
Well didn't explode, but still a good play
+1 Reply
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