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Fan Yang

Xilinx Inc. (XLNX) is Testing a Key Pivot and I Would Not Rely on Support Here

Xilinx Inc. $XLNX has been in a choppy consolidation since price surged to $140 by late April 2019. We can see on the daily chart that price retreated sharply, but found support just under $100. It is apparent now that there is a support/resistance pivot in the $95-$98 area. However, this time around, I am not so confident it will hold.

XLNX Daily Chart

(click to enlarge)

Bearish Signs:
- The first sign that bears are now in control is the fact that the high in July was around $132, failing to challenge the 140 high in April. A lower high by definition and without any context is bearish. The context  here is that price is consolidating, so we can say that price has turned neutral-bearish after the prevailing bull run.
- The bearish component has since dominated as price was held under the cluster of moving averages, most important the 200-simple moving average, since August. 
- And most recently, the previous week closed with a strong bearish move that is threatening the support. The relatively strong volume is also a warning for me to NOT rely on the $95 support. 
- Instead, I am thinking of buying XLNX until price falls into the $78-$83 area - around $80. 
- The overall market looks primed for consolidation if not a sharp bearish correction. In this environment, I have been rotating out of the market into cash, looking for dips to buy on.

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