Loooking at Capital Source Inc. it appears that an ABC correction from its .90 cent low has completed after trading to 2.99 on November 2, 2009. The correction from 3.55 to 5.08 could have been a small irregular correction of the B wave as it took out the prior high of 4.98. The C wave did correct towards a 62% retracement level reaching the 2.99 mark, though 2.45 would have been the exact measurement taking into account an irregular move. This low still could be in play before a significant move higher.
Right now it does seem that CSE has put down the elements for a move higher as it has completed wave 1 and wave 2 off the 2.99 low. I’m going to focus on the trading of 3.62 to 4.04 as wave 1 internal of a larger wave 3 move higher. Wave 3 of this internal wave would reach towards 4.55, wave 5 towards 5.13.
Yesterday’s trading high of 4.20 showed resistance. CSE might trade right to its 4.55 level before giving a nice entry point. If it does correct this morning, watch for CSE to correct this move to 38% retracement of 3.98, with the 3.61 level as a sell stop.
The stock should trade higher to 4.55 initially before testing the 3.73 level again even if a larger daily wave 3 move is not in play.
