XING And GS

THAR SHE BLOWS!! Technical breakout in XING, above 2.23. This is a relatively thinly traded stock. 100-day average volume is only 187,000, but on any technical breakout, we like to see buying interest coming in, on volume.

Nice follow-thru buying off the breakout, as the stock moved into the 2.30's...

...and, into the 2.40's and 2.50's. Very nice. Volume on the session was 1.4 million shares, the heaviest volume in XING since July, 2008, and heavier volume than the 992,000 December 9 "Gap And Crap" Reversal candle at the top of the Kumo (Cloud), seen in the next chart.

The breakout puts targets of 2.84 IN PLAY (that's the high of the December 9 "Gap And Crap" Reversal Candle), and 3.34 IN PLAY. As you know, I'm conservative about targets. When I've got choices of highs to use, and there are several in 2009, I always use the most conservative so that I'm not overly ambitious with targets. In this case, the most consevative of the highs is 2.12. It would be perfectly fine to use the 2.23 highs.

Math:

2.12 - The most conservative of the 2009 highs
0.90 - The low

2.12 - 0.90 = 1.22 points of upside above 2.12

2.12 + 1.22 = Target: 3.34 IN PLAY

Since yesterday's breakout was above the recent 2.23...2.23 resistance, and we already had broken out above 2.12, that really justifies using 2.23 to establish the target, but again, I'm consevative. Using the 2.23 high to establish the breakout target puts 3.56 IN PLAY, which is fine.

Regardless of which target we use, the target is a measured move just for this particular breakout, so it certainly doesn't mean that XING can't or won't go higher than that.

Goldman gapped down yesterday morning, from 143.13 to 141.91, below the prior day's low (white circle). I shorted it just below 142.52, the 50% retracement of the gap, but wasn't real happy to see the entire gap get filled, nor was I happy to see GS go into the green on a day when the general market was down. UGH. Don't you love it when you're short on a down day, and YOUR stock is UP?! LOL.

GS sold off to 142.00 from the morning high of 143.37, putting my trade in the green, but it rallied back to 142.97, near UNCH, while the general market remained solidly down, putting my trade back in the red. UGH.

Knowing, as we do, that this is "the stock that STUBBORNLY refuses to die," (LOL), when it sold off again late morning, but wasn't anywhere close to taking out the opening low, I wasn't willing to stay in there for another rally attempt. I threw it in for a small gain.

In the afternoon, Goldman took out the morning low, but in the final half hour, GS staged one its trademark "I STUBBORNLY refuse to die" rallies, on volume.


It looked to have closed at 142.75, but they suddenly knocked it down in the final tick, to 142.15. I don't know what that was, but I can promise you that The Bears won't be saying anything about "market manipulation" to describe tha-a-at nice little drop! LOL. Kidding aside, some of these late day rallies in Goldman do look a tad suspicious, eh? That's alright. We'll "play it as it lies."

Goldman still is trading within the Rising Wedge. I've put the data points for the trendlines on the chart. Speaking of suspicious...

...the MACD has me suspicious about another rally attempt in Goldman, toward the top of the Rising Wedge. It has failed twice at its signal line (the last two red arrows) but as the MACD itself moved lower, to Green #2, the Histogram below (vertical black lines) at the corresponding Green #2 flattened out, showing a positive divergence.

The MACD continued down to a "lower low," yesterday, at Green #3, but the Histogram at the corresponding Green #3 higher, showing an even stronger positive divergence than at Green Data Points #2. While we never allow indicators to TELL US what to do, the MACD is "indicating to us" that there now are TWO positive divergences in the Histogram, and it's up to us to decide whether or not we want to do anything about that.

For example, Goldman is down three days in a row, but The Bears haven't quite been able to challenge the bottom of the Rising Wedge, so the stock hasn't done anything wrong yet. If we should see Goldman go down there and tag the bottom of the Rising Wedge, or come close to it (including a nominal violation to the downside), then rally back to UNCH...then go green...then take out yesterday's high of 143.31...

...those moves would suggest "Be careful, now!"

Gain: $200