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Coincidence\? Hang around and find out

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Anytime I make an observation and just out of coincidence a fell trader makes the same type of observation on his/her own and blurts it out, I get the feeling that the MARKET may also be observing this.

A couple of days ago, I was looking at the point and figure chart of Adolph Coors (NYSE:RKY) $69.20 +1.58% and eyeballing a bullish vertical count of $92. At the time, the stock had not yet traded the $68 level, which was a pending triple-top buy signal, one of the more powerful buy signals on a point and figure chart.

Then last night, Kent Barton, one of the play-writers for premierinvestor.net exclaimed.... "hey Jeff, check this out!"

Adolph Coors Chart - $1 box

In last night's market monitor and then again this morning, I've profiled shares of RKY as bullish. What Kent saw, what I was, what we all see is a bullish vertical count of $92, a stock trading $69 (now) and what looks to be another rather impressive column of X (from 52-67) as if the MARKET is thirsty for the stock.

Adolph Coors Chart - Daily Interval

Kent used the retracement tool along with the bullish vertical count of $92 from the point and figure chart to place a retracement bracket on RKY. Is it a coincidence that the 50% retracement came into play as resistance?

Upon further investigation, I looked at the volume. Note the two "red" spikes in volume that came on downward moves. To me, this indicates an institutional seller, most likely taking profits from bullish positions below $52. Nothing wrong with that. If you're a believer in supply/demand (like I am) then we may now be thinking the seller at $67.86 is gone and the stock can begin to resume its upward progression.

Is all this a coincidence? Stick around and find out. I liked the RKY October $70's (RKYJN) at $3.80 in this morning's market monitor, no stop and look to sell between $82.71 and $92 between now and October expiration.

Jeff Bailey
Senior Market Technician
Option Investor

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