Year: 2015

SNC update

Hamilton

snc mar 5 2015 bsnc mar 5 2015

See also our previous blog on SNC. In the big picture we are now wondering if a triangle wave 4 is in the making. This would be very bullish so we are only wondering but nevertheless, given another small triangle that the stock just sort of dropped out, it seems quite possible that this stock would, before doing anything else, rebound to that $45 level. As far as we can tell this thrust has the right size and structure so it may be done. To play it safe -  not always the smartest thing to do – you may want to watch it drop closer to $32.80.

Some people believe this stock may be overdone to the downside. There is this boyish looking Maxim , head of research at Dundee, who is very intelligent and articulate and does suggest it is overdone. I believe his target is around $50 or so.

CSIQ, Canadian Solar (on Nasd.), FSLR

Hamilton

csiq 5 mar 2015

Together with two other solar 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.

DAX, another take.

Hamilton

dax mar 4 2015 sDAX mar 4 2015 b

The Dax’s performance is absolutely fascinating. At the recent high of 11465 it was up 37% in 4 1/2 months. In a very crude way I have figured out that there were only three previous occasions where the Dax may have performed in a similar super bullish fashion. The little purple arrows, all equally long (but this is not a semi-log chart!) indicate where and when those events might have occurred. In every case it would have been a 5th wave ( but not always the same degree). In both the two previous occasions the advance is immediately erased! They are separately shown below;

DAX mar 4 2015 i

Only the one starting in late ’99 and early ‘00 is comparable in duration and size (smaller in absolute terms but bigger as a percentage). It too appears to be a “thrust” out of a triangle and peaking just above the apex. Note that after that peak the Dax has it’s biggest drop ever, both absolute and as a percentage, losing roughly 3/4 of it’s value.

     Will history repeat itself ? Mostly it does as otherwise pattern recognition would be a useless endeavour, which , perhaps , it is.