Wednesday, February 8, 2012

Xinyuan Real Estate Technical Update 2-8

Today's chart for XIN reflects a crucial point of indecision in the short-term.

XIN had previously appeared to break out of what looked like an ascending triangle pattern with an uptick of volume on the break above 2.43.  But in the last two sessions it has dropped back below 2.43 and is retesting the bottom of the upward channel drawn above.  If it breaks through this channel to the downside, given MACD crossing down, there could be some short-term downside.  Another indicator of potential downside is what looks like a bearish rising wedge given the bottom channel up and the dashed line above. 

Of course, this could easily turn into an upward channel, or morph into something else, in this thinly traded stock.  And so far XIN has held up well after making such a strong move in January.  So the next few trading sessions appear likely to set the direction, at least until earnings come in a few weeks.

Disclosure: Long $XIN 

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