I wrote about the "Low volatility Breakout" back in July 2006. All of the criteria I elaborated back then apply to this trade setup for CSIQ. The only difference is that back then I used a 10 period EMA and now I use the 5 EMA (the 5 comes from Trader-X).The only other observation I would add now from further experience is that for trending stocks on lower time frames such as this, the first consolidation bar usually holds as support. If it doesn't, it almost always leads to some sort of retracement. The red line segments are areas where I tightened my stop. After the break above resistance, allow for a retest of the BO point.
Parabolic moves usually have sharp reversals, so you want to be ready to take profits quickly. After price failed to hold $27.00 I immediately tightened my stop to $26.50 for a stop out. The ideal entry is at the break of the blue line, but I didn't mind the late entry because the setup met all of the criteria. At the very least, I expected it test resistance. (charts - daily, followed by 15 min, and 5 min.)
6 comments:
Great stuff.
Is this the type of breakout HCPG talked about or their are others?
Jamie,
A few of those and you can retire! Rock and roll boom, boom. I saw it after the fact on my solar page. They all reversed, broke out, pivoted as the SPY did 12ish. Was this a WL stock for you? Or Briefing Suntech Solar Conf?
Jamie - how do you screen for these setups - I notice this stock is not on your October watchlist and it does not appear to be a gap up/down candidate. -Tom
Hey guys,
I did not screen for this setup. BL was actually my inspiration here when he mentioned trading solar as a group.
I traded CSIQ on November 14th as a gapper setup and decided to add it to my short list of alternative energy names. So far I only have a few names - FSLR, JASO, WFR, STP, ENER and CSIQ, but hope to review and and add to the list over the holidays. Also plan to update my regular WL.
HCPG has featured several solar names on their bullish BO lists recently. CSIQ was not one of them, however, a quick review of the dailies and you can quickly spot which ones are setting up to BO of the recent trading ranges.
This group is a good bet as long as energy prices remain high. If oil prices are on the move, solar stocks are a good way to get in on that play.
impressive... talk about a holiday bonus!!
OONR7,
That's pretty much how it feels. Just when I thought the day was going to be a complete dud, it turned into a gem.
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