For more info please review previous blogs. Looking at this trio of solar companies it sure looks like the tide is going out again. Here are two charts;
We chose these two because they both sport a very distinct “wedge” formation. In both cases there is some overlap and in the case of SCTY the lower trend line is already broken decisively. On the first chart we think we are looking at a C wave whereas on the second chart it is a 5th. CSIQ is simple overbought. All three are a sell.
We are within spitting distance of our target established on Feb. 12 of about $5. A number of EW counts are possible here so we prefer to take our cue from other technical indicators. The RSI is close to a low and the 200 day moving average has krept up to meet the stock’s value. If short we would buy the stock back but going long “naked” is a more dubious proposition.
A day before it happened we warned that this stock was in for a drop after a little push higher. Precisely what it did. The drop turned out to be a little more violent than initially anticipated, whipping out about 50% of all previous gains. Presently we do not know if this is a wave 4 with new highs to come, or if we are still in the pull back that will become more complex. Either way we would stay out.
The usual then, June 25th 2013, and now charts;
3/4 of a year have passed and nothing has changed except that the stock is up about 20% as predicted. The bank has paid billions in fines and compensation and has lost eleven of fifteen top management people. Recently it managed to regain all value that it had shed since 1999 by double topping and even adding some. Nevertheless the count is not any clearer; we are either in the c of a larger B-wave, or we are doing a 5th wave after a fairly extended triangle. Triangle measurements would suggest a top at, alternatively $65 or $70 Looking at the short term charts;
the picture does not become much clearer. The RSI and PMO have a little more room left to go, perhaps as in a throw-over in a diagonal or wedge. What is clear is that the upside is limited. We would exit here or apply a tight running stop. Alternatively we would short the stock if it moves up another dollar.