XING: Failed Countertrend Rally

(Click On Chart To Enlarge)

After last week's failures in the Hourly, Daily and Weekly charts, XING found its footing at the 10.56 gap, putting in a low of 10.54.

After the last breakdown of the Descending Triangle (in white), at 11.50, we want to examine the quality of the next rally, to determine if it's just a countertrend rally (a rally in a bearish trend), or if it's something more than that.

After the breakdown (at 11.50), "Former support 'should be' resistance." It was, exactly at 11.50 yesterday.

Coming off the 10.54 low, we label that with Yellow #1, to see if a pattern emergees. At the first high before a pullback, we put Yellow #2 (that was in the 11.40s). At the next low, Yellow #3, and at the next high (11.50), we put Yellow #4.

We can see now that we've got a Bearish Rising Wedge. Those aren't ALWAYS bearish (nothing is). We look for confirmation that it actually IS bearish:

Confirmation #1: Failure at "former support of 11.50, was resistance." We got that yesterday.

Confirmation #2: A break of the trendline connecting Yellow #1 and Yellow #3. We got that this morning.

Confirmation #3: A "lower low" than yesterday's 10.94 low. We got that this morning, with today's 10.83 low.

Technically, XING is a very weak puppy, given those confirmations, at this point, that the rally off 10.54 to 11.50 was nothing more than a bearish countertrend rally. What would refute that, would be for XING to get above 11.50, and hold there.

Fundamentally, XING sure could use the release of a great earnings report, which obviously could trump the poor technicals with a gap above all of the resistance, now between 11.00-11.97.