正文
[very much the same mean reversal idea, he is more booky]
http://scibbytrading.*b*l*o*g*s*p*ot.com/2007/12/technical-analysis-of-suntech-power-stp.html
Monday, December 3, 2007
Technical analysis of Suntech Power (STP)
Dear All,
it is time to go short on this stock, but I want to give you a rational analysis of this by revisiting my favourite short stock - STP.
So lets revisit the last two months of trading.
STP took off 10/17 @ $45 (which was a trade on high volume on a cup and handle breakout). Exacty buy point was $45.04.
1) The stock extended to a high of $62.18 in 9 trading days. The move was $17.14 or 38%.
It has then retreat from a high hit on 10/29 to a low hit on 02/11 (just 5 days decline to 54.63). The stock has retreated 12% or $7.55 or 44% of the previous move.
2) It rallied quickly back up in just four trading days from from $54.63 to $75.64 (looked like a climax top) on 08/11 (in just 3 trading days the stock went up $21.01 or another 38%!
Another 2 day retreat to $55.50 (whereby the stock lost nearly all its gains of the last move, i.e. $20.14).
3) Subsequently in another 5 trading days the stock went back to a lower high to $73.20 (on 11/19). This time the stock made a move of only $17.70 or 32% (less powerful).
4) A new retreat of $15.20 to $58 in just two days, and the market turned again with another what I believe final move of 6 trading from $58 to $84.94 (total move of $26.94 or 46%).
So far moves were as follows:
Move 1 - $17.14 or 38% in 9 trading days
Move 2 - $21.01 or 38% in 3 trading days
Move 3 - $17.70 or 32% in 5 trading days
Move 4 - $26.94 or 46% in 6 trading days
Corrections were as follows:
Decline 1 - $7.55 or 12% or 44% of previous move in 5 days
Decline 2 - $20.14 or 26% or 95% of previous move in 2 days
Decline 3 - $15.20 or 21% or 86% of previous move in 2 days
Decline 4 - so far from $84.94 down to ?? (today is the first day of correction as the stock did not manage a new high).
Based on recent action, the more powerful the move upwards, the more powerful the correction (as volume is increasing). In most probabilities STP will correct from 80-100% of the last move, as the rally was the strongest.
Based also on current trends 85-95% of the last rally means a retreat of $23-$25 from high.
Meaning the price target now must move is on the downside to $60.
Furthermore this time the correction will take longer.
And if the stock goes below $60 it might man a change of trend. In order to know that, let it go to $60 and see if it manages to rally back above.
It will be very difficult to sustain any further moves up given the current economic scenario and my strong conviction is that other leaders such as FSLR SPWR JASO are faltering and the stocks that have not participated in the previous rallies such as CSUN and SOLF are jokingly in a leading position trading in absurd levels.
Conclusion - Friday was a sign to SELL in STP. If you have not seen this, I hope to have now helped you picture it more clearly.
Posted by Scibby at 1:51 PM
http://scibbytrading.*b*l*o*g*s*p*ot.com/2007/12/technical-analysis-of-suntech-power-stp.html
Monday, December 3, 2007
Technical analysis of Suntech Power (STP)
Dear All,
it is time to go short on this stock, but I want to give you a rational analysis of this by revisiting my favourite short stock - STP.
So lets revisit the last two months of trading.
STP took off 10/17 @ $45 (which was a trade on high volume on a cup and handle breakout). Exacty buy point was $45.04.
1) The stock extended to a high of $62.18 in 9 trading days. The move was $17.14 or 38%.
It has then retreat from a high hit on 10/29 to a low hit on 02/11 (just 5 days decline to 54.63). The stock has retreated 12% or $7.55 or 44% of the previous move.
2) It rallied quickly back up in just four trading days from from $54.63 to $75.64 (looked like a climax top) on 08/11 (in just 3 trading days the stock went up $21.01 or another 38%!
Another 2 day retreat to $55.50 (whereby the stock lost nearly all its gains of the last move, i.e. $20.14).
3) Subsequently in another 5 trading days the stock went back to a lower high to $73.20 (on 11/19). This time the stock made a move of only $17.70 or 32% (less powerful).
4) A new retreat of $15.20 to $58 in just two days, and the market turned again with another what I believe final move of 6 trading from $58 to $84.94 (total move of $26.94 or 46%).
So far moves were as follows:
Move 1 - $17.14 or 38% in 9 trading days
Move 2 - $21.01 or 38% in 3 trading days
Move 3 - $17.70 or 32% in 5 trading days
Move 4 - $26.94 or 46% in 6 trading days
Corrections were as follows:
Decline 1 - $7.55 or 12% or 44% of previous move in 5 days
Decline 2 - $20.14 or 26% or 95% of previous move in 2 days
Decline 3 - $15.20 or 21% or 86% of previous move in 2 days
Decline 4 - so far from $84.94 down to ?? (today is the first day of correction as the stock did not manage a new high).
Based on recent action, the more powerful the move upwards, the more powerful the correction (as volume is increasing). In most probabilities STP will correct from 80-100% of the last move, as the rally was the strongest.
Based also on current trends 85-95% of the last rally means a retreat of $23-$25 from high.
Meaning the price target now must move is on the downside to $60.
Furthermore this time the correction will take longer.
And if the stock goes below $60 it might man a change of trend. In order to know that, let it go to $60 and see if it manages to rally back above.
It will be very difficult to sustain any further moves up given the current economic scenario and my strong conviction is that other leaders such as FSLR SPWR JASO are faltering and the stocks that have not participated in the previous rallies such as CSUN and SOLF are jokingly in a leading position trading in absurd levels.
Conclusion - Friday was a sign to SELL in STP. If you have not seen this, I hope to have now helped you picture it more clearly.
Posted by Scibby at 1:51 PM
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