Support and Resistance Example, Canadian Solar (CSIQ)

The following stock chart of Canadian Solar (CSIQ) offers a great example of simple support and resistance. Support and Resistance is a basic form of technical analysis used commonly every day to mark potential buy and sell points on a stock chart.

Note: This chart of Canadian Solar (CSIQ) is a six month daily stock chart:

1. The blue 1 show us how Canadian Solar originally broke through resistance at $47.50 to claim new highs. The stock though a few days later collapsed back into its base, a very bearish sign.

2. The blue 2 shows us how Canadian Solar then trended down and fell below its key $35 support trendline. The stock attempted to rally back above this line and did but the very next day fell back under, another bearish sign.

3. The blue 3 shows how the latest trendline support at $26 a share has been broken. Volume is above average as well which marks another distribution day for CSIQ stock.

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Comments

  1. Posted by Karen on September 9, 2008 at 9:57 pm

    Solar stocks have been losing the heat recently due to potential reduction in subsidies in European markets, declining oil price, and over supply of silicon. CSIQ is no exception. Today's drop for solar stocks show that investors are worrying that the solar hype would not recover despite many companies posted record profit.

    Karen W
    Short Squeeze List

  2. Posted by kanerd on September 10, 2008 at 10:53 am

    Blain you make this so easy, thanks!!

  3. Posted by RayJMan on September 11, 2008 at 9:57 pm

    I'm somewhat in agreement with Karen W
    however, despite street sentiment, somehow they continue to make money, so I guess I'm bullish on alternative energy.
    Needless to say, there were some awfully bearish 52wk lows on FAN (wind) today.
    On a technical basis I've just been playing the ups & downs on chart.
    I sold an ESLR straddle from $7.5 (puts kicked in pretty hard, so i'm sure this will hit my taxes), but I also had TAN calls (the solar ETF) from $20, and puts from $25 once the institutional $$ stopped flowing in.
    Shortly....I think the solars do move as a group.
    There are 2 ETFs if you want to stay clear from the volatility on individual stocks:
    TAN & KWT
    There are also a few Rydex funds for long term investors.

  4. Posted by GerryV on August 8, 2010 at 11:26 pm

    You can never learn enough, and this post just taught me something new. Thanks for the info.