Friday, January 3, 2014

Friday's Prospects: No Trade

No symbols survived my second round of analysis. (See "Friday's Prospects" for the first round.) The finalists were ASNA, PVH, SCG, SPWR and TSL.

Trina Solar Ltd. (TSL) came closest to warranting a full analysis. It has a bullish ranking from Zacks and its options are liquid enough for me to trade.

However, as the chart below shows, TSL has clearly entered a correction of its rise from August. The present wave B to the upside will, under Elliott rules, be followed by a wave C the downside. 

C waves can be quite devastating, so I decided to set TSL aside.

Click on chart to enlarge.
TSL 180 days 5-hour bars (left), 90 days 1-hour bars (right)


My shorter-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.

Elliott wave analysis tracks patterns in price movements. The principal practitioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading

Several web sites summarize Elliott wave theory, among them, Investopedia, StockCharts and Wikipedia.

See my post "Chart Analysis: Nomenclature" for an explanation of my method for labeling waves on the chart.

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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