XING: Bullish Falling Wedge

(Click On Chart To Enlarge)

My apologies for the fact that this chart looks like I threw a pizza pie at it, but we've got a lot going on in it. LOL.

Back in January, the chart was similar in the respect that we had "nested patterns" (patterns within patterns) and pattern "morphing" (patterns changing into something else) and two pattern "fractals" (patterns that repeat).

I can see why people give up on technical analysis and call it useless and such things, because it can become frustrating watching the patterns develop, and trying to figure it all out. And, sometimes we don't figure it out at all, either through some lacking on the part of the technician who is interpreting the chart, or because there simply isn't a pattern to discern.

If you have the time and the interest, scroll down to my October 10 post "XING: January Rally." Those who remember my posts back in January (Voova...Oliver...Thai) will recall all of the head scratching that we did during the pattern development and the pattern "morphing," but a few days after we bought XING, we got our anticipated breakout on January 16 on the Dutton upgrade, and oh buddy!...that rally out of our QUADRUPLE nested bullish pattern was an absolute thing of beauty. All four of our targets got MADE, the last one at 19.06, not far from the eventual high.

"Take Profits When Targets Get MADE."

Currently, XING is "on the ropes," after all of technical damage done the charts last week. We had FOUR upside targets that got MADE, and yesterday, we had our first downside target of 10.77 get MADE, and although there wasn't a pattern measurement to give us a target of 10.41-10.56 (the October 8 gap), that definitely was IN PLAY after Friday's breakdown of the Descending Triangle, and that also got MADE (yesterday's low was 10.54). While that wasn't very pleasant, it's out of the way, and XING now has a chance to resume acting bullish.

Yesterday's 11.45 open is questionable (there didn't appear to be any trades there), but here's why that doesn't matter too much:

1. Look at the Descending Triangle pattern (in blue...#1 through #4) that we discussed all last week. The lows of that pattern were 11.51...11.53...11.50...11.50...and when that support got taken out, XING went down very quickly to an immediate gap fill of 11.17, a minimum expectation. Then yesterday, our 10.77 measured move target got MADE.

Math:

12.29 - High of the Descending Triangle

11.53 - The most consevative of the 11.53-11.50 lows, so that we don't overestimate)

12.29 - 11.53 = 0.76 points. 11.53 - 0.76 = Target: 10.77 IN PLAY.

If anyone wants to use the actual low of 11.50 to measure, that's perfectly fine. That target would be 10.71, and that also MADE. I like to be conservative.

2. Patterns often "morph" (change into something else), and they also often are "nested" a pattern within a pattern.

Look at the pattern in BLACK. That's a "possible" Bullish Falling Wedge, and the Descending Triangle (in blue) is "nested" within it. 12.29 is the high...yesterday's 10.54 is the low.

The reason that yesterday's possibly erroneous 11.45 open isn't going to matter much, is because we need to take out the top of the Bullish Falling Wedge any way (that's the trendline connecting Black #1 and Black #3), and that data point for today, October 23, comes in at 11.4987, so a print today of 11.50 is a technical breakout of the "possible" Bullish Falling Wedge.

Did you say 11.50?

Yep.

Umm-mm, wasn't that last week's support, and doesn't "former support become resistance?"

Yep.

That's a problem that XING has been having lately. The 11.95-11.94 Cup & Handle breakout was a breakout into IMMEDIATE resistance, beginning at 12.08, which was The Rectangle pattern low, prior to the smackdown.

A breakout today at 11.50 also is a breakout into IMMEDIATE resistance. It would be a start in the right direction, but it might result in a lot of head banging with those players trapped inside the Descending Triangle (11.50 all the way up to 12.29, the high of both the Descending Triangle and this "possible" Bullish Falling Wedge).

I bought the last Bullish Falling Wedge breakout (the pattern in purple) because we had some head room between there and 11.95-11.94 resistance, but I'll have to pass on this one if we get the print of 11.50 because I don't like buying into IMMEDIATE resistance.

Key Numbers:

11.95-11.94 - The highs of the Cup & Handle

11.97 - last week's Descending Triangle breakout failure high.

If those can get taken out to the upside, with prices remaining above them, that would look much better.

Sorry that this was so lengthy, if anyone got this far, but when I was learning technical analysis, I needed a lot of explanations, so maybe someone else needs that, too :)

Good luck, everyone!