(Click On Chart To Enlarge)
On Wednesday, XING broke above the top of the Bear Flag, putting 9.91 IN PLAY (the neckline of the H&S Top), and 10.05 IN PLAY (Bear Flag measured move). Yesterday is the first time that XING has had an upside target IN PLAY on a closing basis for quite awhile.
The downside targets listed in the upper right corner also are IN PLAY. One of them is ON HOLD because XING has closed above the 8.82 Head of the failed Bullish Inverse H&S (pattern in green).
The upside targets are against the bearish trend, so they are less like to get MADE than they would be if the short and intermediate-term trends were bullish. Absent good news on the fundamentals, XING has to rally into resistance, i.e., longs trapped in the Bearish H&S Top, many of whom are willing sellers on any rally to that level.
2 comments:
In my humble opinion, the latest bearish channel has a very good chance to prevail. In the past, you have said that you don't look at the fundamentals or news per say,ONLY to the market reaction to these. There has been many gains made in other stocks this past year and therefore I am sure the desire to sell losers in Dec for tax-purposes should leave a mark. Do you ignore this as well?
(In my humble opinion, the latest bearish channel has a very good chance to prevail).
Hi, Bauz,
Anything is possible, of course, but that's going to be more difficult since yesterday's candle has at least temporarily negated the bullish breakout.
Yesterday was a Bearish Engulfing pattern that closed below ALL of the breakout day's (Thursday) trading.
(In the past, you have said that you don't look at the fundamentals or news per say,ONLY to the market reaction to these).
Right.
As we discussed recently, since XING's earnings, we have had at least five iterations of news that was anticipated and/or interpreted as bullish, but that played out bearishly in the chart. Those five are listed in the bottom left hand corner of one of my recent charts, if you want to read them.
You know the expression, "Do as I SAY, not as I DO?" LOL.
At XING's release of earnings, for example, the stock opened much higher on a "Gap To Crap," then it had a horrible reversal.
The big opening gap was SAYING that earnings were bullish, but what were players actually DOING? They were selling. That's what I look at. The REACTION to what's being said about the fundamentals, which is why I posted on the morning of Oct. 26 that I was selling my QXM at 11.70 due to the negative REACTION to XING's earnings.
(There has been many gains made in other stocks this past year and therefore I am sure the desire to sell losers in Dec for tax-purposes should leave a mark. Do you ignore this as well?)
Sorry, bauz, but I don't quite understand your meaning.
XING currently is down 32% for 2007. Many other stocks have had very good gains, so it's certainly reasonable to expect some tax loss selling of XING, to offset gains in other stocks.
That said, I don't try to guess who is selling, why they're selling, or how many people will sell, etc. I have no way of knowing that. I would "just be aware of it," but I'd still play the chart as it lies, so to speak.
In other words, if XING just had the kind of bullish breakout that it did last January, I would compeltely ignore any threat of tax loss selling, and stay with the bullish breakout.
But, given the fact that Thursday's Bear Flag breakout wasn't nearly that bullish, and given the fact that the breakout was reversed on Friday, I would have sold and taken the money if I had been long Wednesday's bounce off the bottom of the flag. (I had no position).
That's just how I would have played it, and not a prediction. I'm lousy at predicting.
Good luck!
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