CSIQ - STRONG HOLD (Imminent STRONG BUY SIGNAL)
On December 15th, when CSIQ was trading just above $25.00, I pointed out the fact that I considered CSIQ to be one of the strongest stocks out there and today it is trading at above $32.00. CSIQ has consistently moved higher, and now in just over 2 months is up around +138% today.
CSIQ has been trading consistently higher since early November within its up trending channel, with very strong support at the lower channel line, which makes CSIQ a STRONG HOLD. Another sign of great strength is the fact that CSIQ's Stochastic has remained in overbought territory since, and is now trading within its own channel; This is very bullish. Traders looking for a good entry point into CSIQ could look at when the CSIQ's Stochastic is in the lower end to get in after a bounce back up in price. As you can see from the price action, CSIQ's trend so far has always seen a couple days up followed by a minor pullback. Right now you should look perhaps for a minor pullback while using the Stochastic to take an entry.
When we look at CSIQ's weekly chart, we can see that CSIQ is currently standing just below a critical resistance level around $33.00. We now have an imminent STRONG BUY SIGNAL with a sharp move above $33.00. At that time CSIQ wouldn't meet significant resistance until the $42.00 and $50.00 level, which gives it significant room to move up.
SNDK - STRONG HOLD (Imminent STRONG BUY SIGNAL)
On the other hand, SNDK has also consistently continued to march higher since early December, and is now up around +63% in just over a month. What is the most remarkable for SNDK is the fact that in the last 26 sessions including today, SNDK has only been down for 5 sessions. On December 17th, after SNDK closed just below a critical resistance level at $24.39, I pointed out the fact that there was an imminent STRONG BUY SIGNAL with a break over that level, which happenned on the next day. On December 28th, I indicated that we had a Dark Cloud Cover at $29.62 which marked a possible pullback at $28, $27, $25, and $24. SNDK pulled back to only $28 to continue higher then.
When we look at SNDK's daily chart, we can see that the up trending channel has remained almost intact with only a slight deviation on December 27th and 28th when the stock moved over its channel before reversing back into it. On Monday, SNDK has yet given us another BUY SIGNAL with the Stochastic. This is when I took my long position and doubled up today, when the stock was up just over +2% (using my Y-Swing strategy accordingly). As long as SNDK maintains this up trending channel line, SNDK will be a STRONG HOLD. SNDK has enormous support within the lower up trending line and a break below this level would be very significant and give us a SELL SIGNAL.
Now when we look at the weekly chart, we can now see that that SNDK is currently standing just below its weekly 200 day MA, which stands around $32.00. We now have an imminent STRONG BUY SIGNAL on weekly term with a sharp move above $32.00, at which point SNDK could shoot up towards $40.00 before meeting any significant resistance. The next resistance levels will then be at $45.00, $50.00, and $55.00. As you can see a move above $32.00 would be very significant assuming it hold above this level, as each significant resistance levels are far apart from each other.
LONG SNDK
Yoel, I had read your post on solar stocks sometime in Aug 2009 and purchased CSIQ at around 16.70. Since my purchase, the stock traded sideways between 15 to 17 until Nov. I sold the stock in beginning of Nov at exactly the same price of acquisition with a loss of commission fees, only to realize that the stock started moving upwards once I sold. Timing is so critical along with analysis. Since my intelligence is limited, I guess I should have consulted on technicals beforing selling my stock? What do you think would be the correct way to handle such situations?
ReplyDeleteThanks,
Holding on to a stock for about 3 months with no returns in a sideways trend is very long, and you should set yourself a rule like I do of dumping a stock after 1 month if it hasn't moved up or if you hadn't had your stop loss order triggered (whether your in minor gains or losses). However despite that, selling CSIQ at the time you did was perhaps the right decision to make as there wasn't any signs yet of seeing CSIQ moving higher, and for all you knew it could have just reverse back down into its sideways trend.
ReplyDeleteHowever, despite your limited knowledge of technical analysis, one thing you should take note of is that a cross above a moving average is usually a BUY SIGNAL and cross below is a SELL SIGNAL. In terms of CSIQ I would have probably sold earlier and take on a loss. The moment you sold was when the stock crossed back above the 50 day MA and held above it and if I were following this stock at that time I would have probably given it a BUY SIGNAL, especially when it crossed above the $18.00 and $20.00 levels. I understand how frustrating it must have been to see a stock move up just after you sold it, and I imagine that it would be hard to get back in after holding on for so long with no returns.
The only thing I can suggest is that you try to follow my Y-Swing strategy that requires no knowledge of technical analysis. However this strategy requires a lot of discipline which takes time to build as you must accept to take on losses from time to time. Most successful traders have more losing trades, while the winners are much bigger than the losers. However, keep in mind that only by learning more about technical analysis will you be able to find opportunities and buy and sell with a better timing.
Whenever you buy any stock you should set an automatic -8.00% stop loss order while not holding on to a stock for more than 1 month if it trades sideways. The moment your up you should set VTSO or manual stop loss orders, this way you won't be making decisions based on your emotions or your gut but will rather let your stop losses do the job. In the end you should never sacrifice more than you should, and I'm talking about both money and time.
While holding CSIQ I believe you were up as much as 13.5% when the stock traded at $18.95 on September 22nd. You got out with around 0.00% which is not normal.Based on my Y-Swing strategy you should have set a -5% VTSO or manual stop loss order based on the last high of $18.95. This would have locked you in a gain of +8.00%. After that you could have gotten back in CSIQ after it gave us another BUY SIGNAL in November. My Y-Swing 4.0 trading strategy was posted in December, so I guess for next time this will help a lot.
Keep in mind that there are always many opportunities in the market and it's just a question of finding them early. CSIQ has been one of the strongest stocks out there since November, and myself did not catch it because I wasn't following this stock back then.
Take this situation as a lesson learned, and you will only get better with time. This was just one lost opportunity among many others to come.
Look at the table I built for my Y-Swing 4.0 Strategy under "Locking in Gains with Virtual Trailing Stop Orders". This will allow you to always know how to act and what orders to place under all scenarios whether you are up or down, without even having to know anything about technical analysis. This is what I consider the first step to becoming a successful trader; step 2 is learning to time your entries with technical analysis
ReplyDeleteYoel,
ReplyDeleteAs always, appreciate all the feedback you provide. Yes, I m learning a lot reading your blog & from my recent experiences and slowly trying to develop the habit to follow the Y-Swing strategy.
Thanks,
DG