Express-1(XPO) Stopping For A Rest
Posted by barkand on June 27, 2011 under Candlestick charts, xattascope | 
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Shares of Express-1 Expedited Solutions (XPO) absolutely exploded higher after an announcement that a private investor would be making a substantial investment in the company. In a little more than a week the shares moved from $2.19 up to $3.48 (that’s 59%). The price now sits at $3.13.
A look at the charts is telling us that the first burst of enthusiasm is now finished. Here’s why:
- Last week there was not one, but two, cases of the bearish “dark cloud cover” candlestick formation.
- Volume is drying up. It is especially noticeable last Thursday (the second-to-last candle on the chart below) when prices covered a huge range but on little volume.
- Prices had been at or above the upper Bollinger band, but the current price of $3.13 is now quite far from the still-rising upper band.
If the rally is over, what happens next? We expect prices to stop and rest in the $2.90 to $3.00 range. That would be 5-8% lower from here. It is the same range where it got stuck last winter. And if we turn on the xattascope and look more closely at the latest two weeks of hourly data, we see that this is a region where prices spent a considerable amount of time.
