Here’s a head and shoulder pattern that you probably missed. Check out Criteo (CRTO) (August 25, 2015)
I don’t even have anything pithy to say, Monday was brutal. Tuesday was pretty brutal about all day long for various reasons. In the morning the S&P, look at the SPY ( NYSEARCA:SPY ) so you see what really happened, big gap up in the open, because China basically moved some shells around in their shell game. So we get the big gap open and then traded down, not really big, everything at least that I was looking at was just flitting around, “Oh here we go,” it never really got up here. And then at 3:00 the “wheels came off the wagon,” all of them at the same time. Any stock that you bought, look at see what it did between 2:50 and 3:10; I’ll tell you what it did.
So with Criteo ( NASDAQ:CRTO ), this thing is all over the place. Here’s the thing, this is that French Internet advertising company, pop ups and all that kind of stuff. Look at the 5-minute chart so you can see the same thing. It just took it a little longer here to sell, but the same thing happened. Well look here, I put this in my notes, the ad blocking on the new IOS from Apple ( NASDAQ:AAPL ) is a problem here for these guys.
So they had weak numbers, the stock went down to the 200-day moving average, but was still hanging in okay. Then came yesterday. This was kind of a bullish hammer, kind of. I mean it was pretty bullish, really, really long tail. The stock closed almost all the way up, almost all the way up to the top of the intraday range. Then today a little gap up, and what happens? Well, the 200-day moving average had been support for this stock this last week, now it’s resistance.
Here’s my point, I’ve liked this company, I still think it’s a fine company, I’m sure there are a lot of really fine people who work there, they all speak French. But this is setting up a really bad pattern. This is really straining to do this for various reasons, but I’ll do it. Left shoulder, head, right shoulder. After this kind of move from $43.00, we’ll say up to about 57.00. So what’s that, 14 points, right? So we breakdown here, 14 points below here gets us to about 29.00, right? “Oh, crap, that happened yesterday.” So we’ve got a completed head and shoulder pattern in a very short period of time from breaking the neckline.
Well now, this pattern, it is what it is, this stock is really heavy, and I’m telling you the reason I’m doing this, I don’t want you to get sucked in here. Again, this was a stock that’s on my “going to be good into 2016.” I’m definitely rethinking that now because of the trading action in this thing yesterday, then plus today. This thing needs to start climbing back above the 200-day moving average very quickly and on strong volume. Otherwise you don’t want to be anywhere near this stock. I’m just telling you it’s had a nice run, the 200-day moving average but with all the market turmoil this thing is not immune. It isn’t immune, and this thing could go lower from here.
Free Chart