In a departure from my usual Updata charts, here's the updated (no pun intended) daily chart for Xcite Energy.As I previously mentioned, the key to this was not the price trendline but the RSI trendline formed from the bullish divergence. We got the bounce yesterday with a doji candle in the price chart and these have both followed though nicely today to the extent that it managed to close back above the short term price uptrend.This is a classic false breakout and shows how important it is to use RSI in conjunction with price to help avoid getting caught out. I'm now long on this with a tight stop below 101p. My initial target will be the 112/3p resistance but if it does get back there then there will be a nice cup and handle pattern which should target 130p and then beyond when we consider the ascending triangle from...
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Tricky one this. Clearly price has dropped through the trendline however the RSI has closed on its trendline which formed from the bullish divergence. Often, but not always, this can be a sign of a false breakout so there's still a chance it could reverse from here. If the RSI follows it down then that's unlikely until at least the lower trendline IMHO.There's a clear "cup" type formation with the "rim" at 113p so it may be worth looking to see if a handle forms - the RSI, currently suggests it could - back up to 112/3p which would target c. 130p if it occurs. Below 96p and the lower trendline and the drop could get nasty so make sure you have stops in place below the important 96p Original link...
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Today was the 3rd inside bar in a row for XEL but with lower highs and a 104.5/104.25p low each day it's looking a lot like a small descending triangle to me which suggests it will break down, probably tomorrow.If so, the target would be about 5p so around the 99p mark. However, we should not assume that it will break down but wait to see which way it does break and then trade that direction. More importantly, we have the uptrend and downtrends converging imminently so they will decide the short/medium term direction. Original link...
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XEL seems to be following through nicely following the RSI breakout with a bullish marubozu today and a close at the day's high, right at the 106p breakout level.Note also how the RSI backtested and bounced (circled). I usually prefer this test to be after a number of days rather then so quickly but as long as the RSI maintains this uptrend, and especially if it can get > 70 then there's a chance of a test of the trendline resistance , 113p and a possible breakout. We should be OK to move stops to below today's low but bel Original link...
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At last there's a signal for a possible move here with a breakout of the daily RSI. My only reservation about this is the fact that the RSI trendline didn't come from a bearish divergence which is my usual criteria for this trade.The SP closed today at 104p which is historically a significant level. On its own that tells us nothing but if it can close above 106p then there will have been a breakout to a higher high following a higher low (I'm referring to the pattern since the 96.4p low).Real strength will only come on a break of 113p as that will form a significant higher high and a trendline break. Original link...
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