Click chart to enlargeWe currently hold no solar names, but have been watching them for a move... one way or the other. SPWR now threatens to break below recent support, and other solar charts look similar. We can buy the cup and handle consolidation pattern in this sector, but think that a break of support is more likely over the short term than a continuation of the rally. If we held these stocks, we'd be watching SPWR and STP closely, because these are the two names with the most defined support levels. ESLR has already given back much of its recent rally.
6 comments:
Snot, I have a TA question.
I am just using the MOS chart, for this. Other Ag, Commodities charts are pretty much similar.
When you said mid of their channel in your SMN last post - this channel started around Aug 07, via Jan,Mar 08 low until date. There is another gentler upward trend from the Jan 07 to Aug 07 lows, which is closer to 200d.
Now, why do you think the stock would stay in its steeper slope and not fall into its more sustainable gentler trend. Should it break the steep uptrend, won't buying near the mid-channel make the position underwater (and possibly uncomfortable) for a longer period of time.
The steeper trend was caused by the rampant FED actions, which is not sustainable. There is also general consensus that the dollar is going to strengthen some more in the summer. I am of the opinion that the steeper trend will be broken, sooner than later
I would appreciate your opinion.
--clarke
MOS is the only chart that does that. POT, CF and AGU have the same trend channels going back to mid 06. This is true when you look at a logarithmic chart, which you have to do when looking at that long of a time frame.
Over that long of a time frame, the arithmetic charts often look parabolic.
We're betting that these stocks stay within their longer term logarithmic channels rather than breaking below them. MOS will just follow whatever the others do, particularly POT, which has emerged as the leader of the whole group. Of course anything is possible, but that's our guess.
Thank you Snot for the clarification. I was mistaken about the generalization using the MOS chart.
--clarke
MON, MTL behave like MOS.
http://img26.picoodle.com/img/img26/4/4/29/f_MONm_f1e72f3.png
You are right that CF, POT in contrast have just one trendline
--clarke
Sorry for spamming Snot, What do you think of DE at this level? , it seems to be hitting its lower trend line now
--clarke
DE got hit by AG's earnings report. Longer term, it's a buy. Ag's report was solid. Wall Street is just playing around again. DE hit it's 180dma in Jan and twice again in March, so we're going to call "bottom of channel" or support at its current 180dma, which is 80.
We're not interested in DE just because the fertilizer and steel stocks are simultaneously offering opportunities. If fert and steel were still at the top of the channel and DE was correcting, we'd be buying DE here.
But look at this lineup:
MOS at the 1/4 mark,
POT at the 3/4 mark,
CF at the 1/2 mark,
AGU at the 3/4 mark,
MTL at the 1/2 mark.
If people haven't done so already, it's time to start scaling back into these names. We've been doing this all along.
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