After a few months of consolidation, the solar stocks are catching FIRE again. Maybe because it's summer? Maybe because oil prices are still relatively high? Who knows? I don't pretend to be a fundamental investor. I don't really care why. I just care that they're going up. Let's take the ETF "TAN" as an example. The 6-month chart goes from the lower left corner to the upper right corner (i.e., the general trend is up). We just had almost 4 months of consolidation (rest) followed by a breakout. Very short-term (intraday charts), it looks a bit over-extended (overbought). The bigger picture (weekly chart, see below) is showing a breakout supported by volume and FORCE. During up-trends, boxes tend to act as continuation patterns and break in the direction of the trend. A box-length move in the direction of break would put the target at $25.92. Ideally, we'd get a light volume pullback to set-up a better risk/reward trade and then start to ramp up with volume. I'd look to buy the start of the ramp on a 30 min chart.
Here's the chart...
I have no position in TAN or other solar stocks right now - although I might buy a light volume pullback in the future. I did own some WFR calls which I sold yesterday. In retrospect, there's not really much point in owning calls on a $5 stock - I should have just bought the common which acts as a deep-in-the-money call which never expires. I still made money on the trade, but it wasn't ideal - especially when the option volume dried up. After 10+ years, I'm still learning with every trade. I guess that's part of the fun.
For more charts and to read a disclaimer, please see my public chart list on stockcharts.com...
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