Wednesday, January 11, 2012

Xinyuan Real Estate Technical Update 1-11-12

Here is today's chart with notes.

It appears the effects of the share repurchase may finally be seen, tightening supply of shares, decreased selling pressure as Federated Investors is likely gone now.  There has been minimal resistance throughout yesterday and today at key points, and the ask keeps getting attacked.  Nice set up finally it seems.

However, diagonal patterns are tricky and the neck line could be retested soon or even break down without notice.  More likely path seems to be up, though.  Perhaps we can soon say goodbye to the $1's...

Here is a more long term chart showing the descending triangle upper and lower trendlines that date back to 2007/2008.

This resistance may be tough to clear, although there is also a bullish falling wedge visible in the chart, plus descending triangles that are not broken to the downside this late in the pattern (and as the chart shows the pattern will be coming to an end within 2012, one way or another) are less reliable. 

Disclosure: Long $XIN

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