Hey, world! I hope you are doing incredible! It is a beautiful August here in Nashville, TN. Hot, but not too hot, ya know? Good summer weather! If it is super hot where you are, this trade might make that A/C bill a little more bearable.
Trade Pick
Canadian Solar (CSIQ) caught my interest early in the morning on August 13. Here’s what I noticed:
• It was gapping up to a very specific location.
• The open was well above the high of the prior day’s black candle.
This is a strong bullish trade, because any trader who sold short on August 12 was immediately losing money the morning of the 13th. In order to exit the trade, the short seller would have to buy to close. That combined with a higher low, the bounce off a trend line, the closing above the $30 resistance and the clearing of the bearish July 29 candle.
Bullish Outlook For CSIQ
In this situation you have a few strategies at your disposal. I’m personally thinking either shares or put sales to keep it simple. As noted on the chart, any pullback to $30 on August 14 or August 15 would be a solid buying location with the whole ‘old resistance is new support’ we’ve got going on.
A nice gap with great volume, the huge white candle and the clearing of tons of resistance and bearish candles, in light of these the pull back, if any, might not be very much at all.
Regardless, for my traders contemplating being in this trade one to four months or so, a stop would be around $27, which is right in the middle of the current gap. My longer-term traders (four months plus) could consider a stop around $21. Ultimate target is $44 with a plan to sell some covered calls on the shares once / if CSIQ hits 34.73
One could also consider selling put options, which is a bullish strategy. I’m highly considering the $28 or $27 Aug week 4, 5, or Sep week 1 expirations. Truly wouldn’t mind getting put the stock at all. Buy low, sell high; that’s the point. This stock looks like it’s heating up! (Terrible pun; simply had to).
If you have any questions, feel free to let me know! Otherwise I’ll ‘see’ you again in the near future. Have an outstanding day!
