A trading signal was triggered on CSIQ at 9:52am today. If we were to act upon it lets try and find out what we may get into.
CSIQ made a low of 3.00 on March 9, 2009 and a high of 19.91 on August 7, 2009. If we consider this length of time to emulate a 5 wave sequence in the daily trading time frame and calculate the length of wave 1 we may determine that wave 1 magnitude is 4.49. Calculated from the low of 3.00 to a high of 7.49 on April 2, 2009. Using this magnitude the wave 5 calculation would come out to be 19.24482. A difference of .66 cents, a 3.34% difference over 5 months and 660% profit.
The current price correction seems to be the wave 2 of a large daily time frame 5 wave sequence. The daily chart shows that 3 waves of the A leg of an ABC correction may be complete. The 30 min time frame chart reinforces this and a short term turn may take place in CSIQ if the A leg is complete after 3 waves and does not continue to a 5 wave pattern A leg of wave 2 on the daily chart.
If the 30 min chart holds todays lows and a B wave forms, begin to determine if a 5 wave uptrend forms instead of a 3 wave in this B leg. If it does a triangle pattern could be forming and the correction could be cut tighter than expected. If a 3 wave B leg forms the final C leg of wave 2 daily chart will push down towards its fibonacci retracement levels. From the March low to the August high look for a 38% correction at 13.45038, and a 62% correction 9.42 – a more likely target.
The current wave 2 correction on the daily chart will not cross the wave 4 of parent wave 1 daily chart low of 9.21 on July 13, 2009 if a parent wave 3 uptrend is to form. If this level is broken then a downtrend could be the dominant wave sequence.
As of today, a short trade could be put on to the upside for the 5 min chart with a stop under today’s low of 14.44 for a 5 wave sequence to 17.37
Thursday September 10, 2009, CSIQ hit our trading profit target of 17.37, trading to a high of 17.45 and then closing at exactly 17.37.
