XING: Monthly Chart

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From last Sunday's entry:

"...as long as XING trades below the 10.08-10.00 bottom rung of resistance, it's bearish and the following downside targets are IN PLAY:
1. 8.82-8.994 (near-term support...the latter rises 0.029 each day)
2. 7.65-7.78 - (August - September lows)"

This week's low was 7.81, within three cents of the top end of Target #2 getting MADE, so that's close enough for a "possible" Double Bottom in the high 7's.

However, since we've still got three more downside targets IN PLAY, and since XING violated the up trendline this week in the monthly chart, we'll take a look at that chart.

In September, XING also violated the up trendline just slightly, which often occurs. That's known as a "shakeout," or a "Bear Trap." XING went on to put in a near-Bullish Engulfing candle in September, missing it only by three cents.

October, however, was a Bearish Doji Star that had two intra-month failures at the neckline of the 10-month H&S Top, and here in November, we're back to the bottom of the channel. The trendline comes in at 8.06, rising $0.12 each month. We want to see how XING handles both the trendline and 7.65 - 7.81 this week, going into the end of the month.

Chart #2 is the breakdown in XING below the 10-month H&S Top on July 17. A gap down opening like that is a fairly unmistakable sign that a stock has got technical problems, and when it doesn't recover quickly, that's good evidence. Sometimes, stocks will rally back to the breakdown, as XING did in late July when it rallied back to the broken neckline, but they don't always, and hanging onto a long position in those situations, hoping for a rally, can be risky business. "Bear markets descend on a cushion of hope."

Chart #3, SMSI, is an example of the latter: a gap down with no rally whatsoever. SMSI had broken below THREE patterns in October, and spent the remainder of the month attempting to recover. On November 1, SMSI gapped down below the June low of 11.91, to 11.88, putting an entire year's worth of longs under water. The high on the day was a "show no mercy" 11.90, exactly one penny below the June low, not allowing any of the longs to get out for a break even.

Charts #2 and #3 are examples of what we want to watch for if XING hasn't put in a Double Bottom here, so that we aren't caught like deer staring into the headlights when we need to be taking action.

XING: Responses To The Fundamentals

XING's recent negative RESPONSES to "Good News:"

1. October 26 earnings - Response: Gap To Crap Bull Trap at 10-month neckline resistance.
2. November 2 Big Buyer at 11.80 - Response: Failure just below 10.80 resistance
3. November 6 Dutton Report - Response: DOUBLE failure at 10.80 resistance
4. November 14 H1 Report - Response: Rally from 9.95, above 10.00 - 10.08 resistance, then a give back of almost all of that entire gain. Yesterday's close was 10.03, only eight cents higher than where XING stood prior to the release of H1.

5. November 16 QXM earnings: Response: Failure to complete the Right Shoulder of a "possible' Bullish Inverse H&S pattern, and a breakdown below the 10.08-10.00 bottom rung of resistance.

If XING can't regain that bottom rung of resistance, next support is the up trendline off the September 14 low, which comes in on November 19 at 8.994, then 8.82, which was the November 9 low. That's important support here because as long as XING trades below the 10.08-10.00 bottom rung of resistance, it's bearish and the following downside targets are IN PLAY:

1. 8.82-8.994 (near-term support...the latter rises 0.029 each day)

2. 7.65-7.78 - (August - September lows)

3. 6.67 - measured move off the November 8 breakdown below 10.08-10.00 trendline

4. 6.53 - measured move off the Halloween close below the October 5 trendline

5. 4.11 - July 17 Crash target

XING: Ahead of QXM's Earnings

XING's recent negative RESPONSES to "Good News:"

1. October 26 earnings - Response: Gap To Crap Bull Trap at 10-month neckline resistance.

2. November 2 Big Buyer at 11.80 - Response: Failure just below 10.80 resistance

3. November 6 Dutton Report - DOUBLE failure at 10.80 resistance

4. November 14 H1 Report - Rally from 9.95, above 10.00 - 10.08 resistance, then a give back of almost all of that entire gain. Yesterday's close was 10.03, only eight cents higher than where XING stood prior to the release of H1.

Included in the RESPONSE to XING's release of H1, however, was the 10.03 close, which was a close above the 10.08 - 10.00 neckline of the 7-week Head & Shoulders Top (blue circles), so if XING can hold here and rally, the stage is set to turn this around to the upside by completing the Right Shoulder of a Bullish Inverse H&S pattern (green circles), and by taking out the 10.80-10.69 neckline to the upside.

That would spring the BEAR TRAP that has been set. Those who sold and/or shorted the November 8 breakdown, and especially those who sold and/or shorted the two little Bullish Hammers on November 9 and 12 (the Head of the pattern) would be "trapped" if XING can successfully break out to the upside.

The breakout doesn't need to occur today, on QXM's earnings. Realistically, everyone who bought XING recently, prior to the November 8 breakdown, is a trapped Bull. All of them paid a higher price than the current 10.03, so many of them will be sellers on any rally. But, if XING can hold this neckline, complete the Right Shoulder and break out above 10.80 - 10.69 in the coming days, that overhead supply of sellers can be worked through.

Otherwise, XING likely is headed for at least a retest of the recent 8.82 low.

XING: Possible Bullish Inverse H&S Pattern

From November 9 post:

"On any rally, we've now got "stacked resistance" at:
1. 9.98-10.08
2. 10.80"

XING managed to rally well into resistance yesterday and now has a chance of a Bullish Inverse H&S breakout on/after QXM earnings if it can form a Right Shoulder here and knock out the down sloping 10.80-10.69 neckline.

The Head of the pattern is the Ascending Triangle that we discussed in the post below. It's 10.06 target got MADE, so that's constructively bullish. XING is selling off quite a bit today, but it's holding near the 9.98-10.08 bottom rung of resistance, trying to establish "former resistance as support." That's also a positive. Today's selloff is on low volume. Another positive.

XING: Ascending Triangle Breakout To Resistance

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In the first chart, we can see that short-term, XING had an Ascending Triangle breakout late yesterday morning that put a target of 10.06 IN PLAY, right in the 9.98-10.08 resistance area, basis the daily chart.

Math for the Ascending Triangle:

9.44 - high (the more conservative of the 9.46 and 9.44 highs)
8.82 - low if the pattern
9.44 - 8.82 = 0.62 points added back to 9.44 = Target: 10.06 IN PLAY

The stock closed yesterday at 9.95, right below the 10.08 - 10.00 down-sloping trendline (currently at 9.98) of the six week top in the daily chart, and XING now is at the bottom rung of stacked resistance.

Yesterday was the first bullish move in XING since the (1) earnings, (2) $11.80 stock purchase and (3) Dutton disasters. All three fundamental events were Bull Traps.

Any CLOSE above this first level of resistance is reason to give the Bears pause instead of paws :)

The latter will depend on the quality of any further rally here. Shorts likely will use the following initial resistance levels to cover:
1. 9.99 - 10.08 (the nearly horizontal trendline)
2. 10.23 - 10.27 (the November 6 Dutton "sell pivot" and the 50 DMA, respectively)
3. 10.81 ( TWICE validated resistance following the Dutton report).

XING - More Technical Difficulties

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After the July Crash, XING turned short-term bullish on September 20 when it took out the 9.98 pivot of a "W"-Bottom (or, Double Bottom), followed through to the upside the next day, and continued higher.

On the first pullback from 11.94, we would expect 9.98 to be support.

"Former resistance 'should be' support."

It was. The October 5 low was 10.08. After the October 26 earnings "Gap To Crap" Reversal, we had several levels of "possible support," but none of them held, so we again were looking for 9.98 - 10.08 support to hold.

November 5, XING put in a low of 10.00, so the 9.98 area was support again, as it "should have been."

November 8, however, after putting in an early morning high of 10.25, just below the 50-day moving average at 10.26, XING broke that key 9.98 - 10.08 support level to the downside.

On any rally, we've now got "stacked resistance" at:

1. 9.98-10.08

2. 10.80

3. 11.09 (the red up trendline, coming off the October 5 low of 10.08. It rises daily.)

4. 11.50

5. 11.94-11.97

XING: Responses To "Good News"

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From my October 30th post, "Responses To Dutton's Calls:"

"The ONLY thing about the fundamentals that is important to me, is the market's RESPONSE to them. Earnings. Upgrades and Downgrades. News items.

Will Dutton's "Speculative" Strong Buy reiteration of October 29 at least get XING rallying back to 11.50 resistance, which is the bottom of the 11.50-11.97 "neutral zone?" Will the reiteration help XING get back inside that neutral zone? Will it help XING get back above 12.00?
That's what I'll be watching for . The market's RESPONSE to the reiteration."

On October 31, XING closed below DOUBLE support: (1) the yellow up trendline off the 10.08 low, which was a VALIDATED trendline (see Yellow #5); and, (2) the white trendline, which was horizontal support in the low 10/80s.

November 2, there was news about the sale of stock, at 11.80, to a big buyer. What was the market's RESPONSE to that "good news?" A "Bull Trap" rally to resistance, at White #1, then a drop to 10.00.

At the beginning of this week, the market anticipated the Dutton Report, and again rallied XING to resistance, at White #2. When the Dutton Report came out on November 6, the market's RESPONSE to the report was to rally XING to White #3, for a VALIDATION of that trendline as resistance, and to rally XING again on Wednesday morning, to White #4 for a SECOND VALIDATION of that trendline as resistance.

Remember now, we knew on October 31 that XING had broken below DOUBLE SUPPORT, ahead of "good news" on the fundamentals, on November 2 and November 6. Sometimes the fundamentals are good enough to trump the technicals, but in these two cases, the technicals not only are trumping the fundamentals, the technicals have given us two confirmations of that fact by validating resistance TWICE, at White #3 and White #4.

In order for XING to stop being bearish, it needs to take out that white trendline (White #1 through White #4), which would put the stock in a neutral zone, below next resistance at 11.35 (the October 30 failed attempt to get to 11.50 resistance), and then resistance at 11.50-11.97 (the "old neutral zone").

VPHM: Since Earnings

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From October 20, 2007 post: "VPHM: Hanging On By A Thread"

"Normally, I try to stay with a trade until I'm stopped out, and I wasn't stopped out on this one, but given the strength of Friday's smackdown in the general market, the fact that VPHM is in Crash Recovery, and the fact that this isn't a particularly strong pattern, I decided that "discretion is the better part of valor," and cashed it in for a very small winning trade (1.8%)."

Sometimes those "safety plays" pay off, as this one did.

VPHM gapped down below the weak Symmetrical Triangle at the release of earnings, and yesterday afternoon, the 7.51 target MADE without any snapback rally after the breakdown.

This morning, VPHM took out 7.51 to the downside, which was a "possible" Double Bottom with the August 10 Exhaustion Gap low of 7.51, so it's at a new 16-month low, looking for a bottom.

QXM: Ascending Triangle Breakdown

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QXM broke out of an Ascending Triangle to the downside on October 29, putting a target of 9.80 IN PLAY.

Math:

12.36 - (The more conservative of the 12.36 - 12-40 highs)

10.44 - The low of the pattern

12.36 - 10.44 = 1.92 points, subtracted from 11.72, the point of the breakdown =

Target: 9.80 IN PLAY

This morning's low thus far is 9.85, within range of the target. QXM has recovered back above 10.00, indicating that a low "could be" in.

XING: Double Break Of Support

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The yellow trendline off the early October low was validated by a successful retest, where the arrow is. At the same time, XING established horizontal support, in the low 10.80s.

The rally to 11.50 resistance that ensued got only to 11.35, then this, BOTH trendlines broke to the downside.

ACOR: Possible Inverse H&S Forming

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After the September 26 breakout of the Bullish Wolfe Wave, ACOR immediately retested the breakout, which was successful, then made a dead run for the target line, at Green #6. It fell shy of achieving it, but in doing so, it established a second data point (21.73) for a "pattern morph" (change) into a possible Bullish Inverse Head & Shoulders (blue circles).

The neckline (21.41-21.73) has an upward slope. There are several different ways to measure the pattern, to derive a target if it breaks out. I always use the most conservative measurement of the choices, so that I don't overestimate, and we're just try to "ballpark" what we're aiming for anyway (it ain't rocket science).

Math:

21.41 - (the more conservative of the 21.41 and 21.73 data points)

15.80 - low of the Head

21.41 - 15.80 = 5.61 points

5.61 added back to 21.41 = a target of 27.02 IN PLAY, if it breaks out.

No guarantees, of course, but these patterns can be very powerful. Two other stocks that I discussed earlier this month, ASPV and QXM both broke out of this pattern, and both of their targets got MADE in a short time.