This Is Why XNET Stock Is Primed for Further Gains

XNET Stock
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XNET Stock: Blockchain Is No Laughing Matter

I have stumbled upon Xunlei Ltd (NASDAQ:XNET) stock, and I must say that this company is very intriguing. It operates in the cloud computing space, and it has recently ventured into the blockchain arena.

Given the backdrop created by Bitcoin and the entire cryptocurrency space, any mention of the word “blockchain” in a company’s news release has caused investors to flock to it. It’s fair to say that there is much excitement currently surrounding Xunlei stock as a result.

I like XNET stock for a number of reasons, and all of them have to do with its stock chart. The patterns on the company’s stock chart are the reason why I believe that higher share prices are on the horizon.

My bullish inclination toward Xunlei stock was created using technical analysis. This method of investment analysis is based on the notion that historical data can be used to forecast what the future may bring. I have been studying and applying this method for nearly two decades, and I feel like I have gained a firm grasp on the subject. Therefore, I feel like I am well equipped to provide some insights regarding the XNET price chart.

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I particularly find this company compelling because it firmly abides by the rules set out by technical analysis, and the following XNET stock chart is a prime example of this.

Xunlei Stock Price

Chart courtesy of StockCharts.com

This stock chart highlights an indicator that is generated when the 50-day moving average, which is highlighted in blue, crosses the 200-day moving average, which is highlighted in red.

When the 50-day moving average crosses above the 200-day moving average, it creates a golden cross pattern. A golden cross is an indication which implies that a bull market is in development and that, therefore, higher stock prices are likely to follow.

When the 50-day moving average crosses below the 200-day moving average, it creates a death cross. A death cross is an indication which implies that a bear market is in development and that, therefore, lower stock prices are likely to follow.

In the context of XNET stock, this indication is very influential. For example, in September 2015, a death cross was generated. This indication remained in bullish alignment for two years, and, during that time frame, Xunlei stock lost over 50% of its value.

It was not until September 2017 that a golden cross was finally generated, and the price action that followed was awe-inspiring. The XNET share price proceeded to appreciate to the tune of 468.42% before a correction finally took hold.

I have reason to believe that this correction has run its course and that Xunlei stock is now going to resume its trend toward higher stock prices. These beliefs are based on the momentum indicator which is highlighted on the following stock chart.

XNET Stock

Chart courtesy of StockCharts.com

The focus of this stock chart is the moving average convergence/divergence (MACD) indicator, which is located in the lower panel.

MACD is an indicator that determines whether bullish or bearish momentum is influencing the price action in a stock. This indicator is both pertinent and significant because a stock cannot stage a sustained move in either direction without the applicable momentum.

In October 2017, a bullish MACD cross was generated, effectively confirming the notion that higher XNET stock prices were likely to prevail, and the stock price acted accordingly.

In November, a bearish MACD cross was generated, and it too effectively confirmed the notion that lower Xunlei stock prices were likely to prevail. Once again, the stock price acted accordingly.

Currently, the MACD indicator is in bullish alignment, after a bullish cross was generated in January 2018. It implies that bullish momentum is now influencing the trading action in XNET and that, therefore, higher prices are likely to prevail.

Analyst Take:

I am bullish on the prospects of Xunlei stock going forward, because the indications on the company’s stock chart support such a view. I will maintain this bullish view on XNET stock as long as these indications remain in bullish alignment.