FSLR Position Management & Trade Set-Up

I haven't covered FSLR in a while, but as I go through my watchlist, I'm picking out the best looking opportunities right now.

I do see some 2 min positive divergence/accumulation in HYG, this is a lever to help the market as it has been extremely weak. How many times have we crossed above and below SPX 2000 over the last week or so with ZERO follow through? This isn't surprising from a staging/cycle point of view, however the head fake move as a transitional momentum creator (to stage 4 decline) is just such a strong concept, it's expected and as I mentioned, the watchlist stocks all show the same trend that looks like they are setting up for decline, but very short term, that pop or bull trap.

In any case, FSLR is a partial (more than half) position entered on 8/7 in to some market strength, Trade Idea: (Longer Term) FSLR , I purposefully left room in the position sizing and risk management for an add-to position at a later date.

The current position looks like this...

The position was entered at $68.46 and is at a -3.89% position loss, which is about a 0.2% portfolio loss, well within the risk management plan which could easily move to 10x that before it would be a stop out.

Since it has been so long since I last covered FSLR as I've been waiting for the ideal area to fill out the position, I'll cover it like I was for the first time.

The daily 3C chart shows there was a decent size base/accumulation (stage 1) zone in early 2012. It appears distribution set in on a scale that becomes interesting as a short during the formation of a large symmetrical triangle.

Many technical traders make the mistake of looking at a triangle of this size as a consolidation/continuation pattern, which would be appropriate for a triangle of about 2-3 weeks at most, but one that lasts most of 2014 is usually a top or a bottom (depending on the preceding trend, in this case a top.

For longer term members you may recall the gold-bugs of 2009-2011 (especially 2011). Saying anything negative about gold was like saying something negative about AAPL around the summer of 2012, traders were in love with these stocks and took anything negative as a personal affront. However, just as we called the AAPL top in 2012, we called the Gold top in 2011 (some of you may remember a fund manager I had been in communication with at the time and him basically reading me the riot act for suggesting gold may have topped), the defining feature of the gold top was the large symmetrical triangle.

 This daily chart of FSLR's triangle is really no different than almost any other triangle these days, whether a 2-3 week consolidation of even an intraday triangle or the small triangle in SCTY last week,  since these are such easily spotted price patterns and since they have such easy to remember technical implications, these are head faked almost all of the time.

In this case, I'm looking at an upside breakout from the triangle as that's what technical traders expect due to the preceding uptrend, the breakout from the triangle is what they'll expect and buy giving Wall St. types the demand and higher prices they need to sell in to or short in to.

As you see from the chart above this one, the daily 3C chart is leading negative at the triangle.


 The 4 hour chart is leading negative at the triangle

The 2 hour chart shows trend confirmation in to the triangle and then distribution at the triangle.

 The 60 min chart is more specific with distribution becoming stronger as the apex of the triangle is reached.

 The 30 min chart is even more specific showing the accumulation zones forming support for the triangle (I can't prove it, but I think a lot of these technical price patterns are purposefully created rather than randomly created as they serve a purpose and technical traders will bite every time).
We also see "in line or 3C, price/trend confirmation and distribution in to higher prices at the apex of the triangle.

The 10 min chart shows the accumulation zone, nearly the same as the broad market in early August, although a bit larger here, perhaps to maintain the shape of the triangle and distribution in to the move in to August the same as the broad market.

I can keep on going, but so far, EVERY timeframe confirms.

At the 5 min chart, this is about the best I have for an FSLR upside bounce, it's not much, really the head fake concept for the broad market as well as for a triangle in specific are the best and strongest evidence I have for a head fake move higher. In other words, we don't have any strong short term accumulation for a head fake move higher, it's mainly the probabilities of the concept, either way, it can't hurt for a new or add-to position.

 The 1 min chart shows accumulation on intraday timeframes leading to this week's pop higher and basically in line since.

I'll be setting price alerts above resistance of the triangle and above the apex so probably somewhere between $71.50 and $74 and of course looking for confirmation, but the multiple timeframes all negative above are strong evidence / probabilities that any short term pop to the upside fails and is useful to short in to for better price positioning, lower risk as a stop can be placed right above the entry and of corse as a head fake move, timing.

This is another one of the longer term position shorts that's looking great in this area for an entry and I'm taking very serious.