CSIQ, Canadian Solar (on Nasd.), FSLR

csiq  5 mar 2015

Together with two other stocks we recommended selling this one back in March 6, 2014, pretty well a year ago to the date. It was at $41 at the time. Then just last month it hit the 62% retracement mark and had completed a textbook correction. WE were asleep on this one but did recommend buying FSLR, more on that later.

The beauty of EW, unlike nuclear physics, you do not need to understand the whole thing, all you need to do in many cases is recognize the last pattern for what it is. In this case a completed correction!. You also know that after a completed correction the stock must go up, most often to the level of the b-wave in the correction. In this case that is at about $40. That is quite a bit so you may not want to take the risk, then just assume that you will get a minimum of 38% of the drop or about $10 (which, by the way, amounts to a 50% return in a single month!)

So we looked at FSLR instead. Here is the chart;

fslr mar 6 2015

Also please look at the previous blog that explains the present position much better. Here too we were asleep at the switch letting the first $9 slip by, but still we are up $12 on $49 which is 25% in less than a month. We are optimistic that this stock has a lot further to go but for the moment it is a little overbought looking at the RSI. But then the b-wave is at $72.