XING: Intraday Chart

(Click On Chart To Enlarge)

"Lastly, I'd like to ask you about the current chart situation of XING. I see a head and shoulders formation on the 120 minute chart. Am I seeing this right? If my understanding of a head and shoulders is correct, the neck line appears to be at $11.87 and the top of the head is at $13.26"

Doug,

You've basically got the right idea.

13.38, Yesterday's high, is the Head

11.53 - 11.52 is the neckline.

11.53 was the early morning low after Wednesday's gap higher

11.52 was yesterday's "reaction low," after the smackdown from the 13.38 high. That was "last support" from Wednesday, and XING was able to scramble higher from there, into yesterday's 12.07 close.

To get your downside target if the 11.53-11.52 neckline breaks, subtract the neckline from the high of the Head, then subtract your answer from the neckline break:

That gives us:

13.38 Head - 11.53 Neckline (I always use the more conservative of the two data points, 11.53 and 11.52) = 1.85 points.

11.53 Neckline break, minus the 1.85 points = Target: 9.68 IN PLAY.

Naturally, we'd want to see the 11.52 get broken, too :)

Targets are just "what the patterns suggest," and "what we're aiming for." No guarantees, and it also depends a lot on the quality of the patterns themselves, in terms of stucture, where they occur in the overall chart, and with respect to time, i.e. "is it just a two day pattern, or is it a two YEAR pattern? Big difference.

For example, this pattern is off a very short-term intraday chart, of only two days' duration. I wouldn't put as much store in it as I would in the QXM breakout of a rock solid four MONTH pattern that I posted this morning.

Nonetheless, given that this pattern has formed at the "bottom rung" of the resistance that we discussed this morning, I certainly would give a breakdown below 11.53-11.52 some credence.

EDIT: Doug, I've been trying for several hours to respond to you on the XING Message Board, with no luck. I'm getting the "Error Message 999" again. Sorry, I gave up :(