Friday, June 28, 2013

I love this chart

Below is a daily chart of the Guggenheim Solar ETF (TAN):

Source: Stockcharts.com

The chart encapsulates a long, steady decline that actually dates back to early 2011. The 50-day MA (blue line) more or less served as resistance during this protracted downtrend. Price bottomed last November at around $12 and has since more than doubled before the recent pullback.

So many bullish things in the chart, I don't know where to start:
  • The inverse head-and-shoulders (green circles). The green line at $20 represents the neckline, which was successfully breached this past February only to revert and sell-off. However, last month the neckline was broken through again, this time more meaningfully with high volume and a gap up (second time is often the charm). 
  • Note the huge reversal day this past April, abruptly halting the downtrend near the 50-day MA with a huge spike-up in volume, clearly signaling a change in sentiment. 
  • The Golden Cross in early February, with the 50-day MA rising up through the 200-day MA.
  • The 200-day MA (red line) had been heading south since 2011, but flattened out earlier this year and now is ascending.
  • Volume spikes this year have occurred for rising price periods, with volume drying up and declining when price has either retreated or consolidated sideways (see orange lines) -- bullish action that suggests ongoing accumulation. In contrast, note the orange box for early last year showing elevated volume as price steadily eroded, suggesting distribution.
  • After the fast and furious run-up from $16 to $26 in April-May, price has since undergone a healthy pullback, holding at the 50-day MA area of $22. More recently price has responded nicely, lifting off and approaching $24, further confirming the 50-day MA as solid support. 
  • Assuming this recent pullback holds, it's bullish to see the RSI remain at around 50 during this price retreat, indicating impressive momentum and confirming a change in trend from bearish to bullish.
I'll leave it at that, you get the point. A very nice chart.

2 comments:

  1. This is a site to view volume and stock technical analysis chart analysis. This site provides leading technical indicator analysis and provides a great stock screener.

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  2. very nice, I like solar too. FSLR, STP, SPWR

    ReplyDelete