A Near Term Shorting Opportunity for XLNX Until 15 Oct 2014

2014년 10월 2일

Price has been trading along the solid blue uptrend line, from Sep 2012 to July 2014. However this trend line was clearly broken after the 22 July 2014 Earnings Release.

We also note a Head & Shoulder trend reversal pattern, with the neckline convincingly broken past the horizontal neckline of $45.80. This signals that the bullish trend mentioned in point 1 is over and a bearish trend is now established.

Further more, we observe a classic Elliott 5-wave pattern in formation. The price action so far matches the description of the first 4 waves of this pattern.

Therefore from points 1, 2 and 3, we project that price is most likely to breakout lower and complete the Elliott 5-wave pattern, if price broke below $41.60

Stop Loss: Above $43.00

Price Target:
$37.55 (Conservative projection of Wave 1)

Time Limit:
If we look closely at the sharp drop in prices in Wave I and Wave III, we note that they coincide with the last 2 Earnings Release Dates. Also prices have retraced upwards after these Earnings Releases.

Hence, ALL short positions should be closed on the first day of trading, after the Earnings release on 15 Oct 2014.

Elliott Wave Basics:
stockcharts.com/school/doku.php?id=chart_school:market_analysis:elliott_wave_theory

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