A Serious Plunge is Coming on Xcite Energy

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Xcite Energy stock (LSE:XEL) is bearish in outlook, and there is no hope of a significant recovery right now. When the market rallies, it would simply proffer opportunities to sell short.

4 EMAs are used for this analysis and they are EMAs 10, 20, 50 and 200. The color that stands for each EMA is shown at the top left corner of the chart. All the EMAs are sloping downwards, showing that long trades are currently not logical. Anytime the EMA 20 or the EMA 50 is tested, one would look for a way to sell short when a bearish candle forms.

Unless the EMA 200 is breached to the upside, and the price closes above it (a Golden Cross), long trades would be suicidal. Those who have been caught in a wrong direction may want to do something about that. We gauge the amount of negativity by hedging with positions that are initially negative but which end positive.

Unless the aforementioned “Golden Cross” happens, things would continue to look dismal on Xcite Energy, coupled with government actions, which sometimes have effects on companies. More and more, what governments decide to do will have more effect on the markets than economic figures now dictate the movements of the prices, which are often unconnected to what is happening in the financial sector. In face of these uncertainties and abnormalities, there is one sure thing: the markets would continue to move seriously.

This forecast is ended by the quote below:

“Identifying the general trend whether on the short/medium/long term is the most essential, and when you figure it out, you stay with the trend. You buy on dips or sell on rallies according whether it’s a down or up trend, but you never bet on a correction against the general trend. Committing to this rule will protect you from sudden and huge losses, as well as guarantees that you will be able to gain the most from a trend when the right moves happen.” – Mohammed Isbeer

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