by Profit Scanner | June 5, 2014 11:12 am
At a time when Chinese solar companies are under fire, traders who are trying to capture a moment in the sun are looking more and more at U.S. solar outfits. Colorado-based Real Goods Solar (RGSE) flashed as a potential bullish play in the space.
At the June 4 close, Profit Scanner powered by Recognia identified a bullish Continuation Wedge pattern that appeared on Real Goods Solar’s chart on volume of 407,800 shares.
A bullish Continuation Wedge pattern tells traders that after a temporary interruption, a stock’s prior uptrend is set to continue. A bullish Continuation Wedge indicates a temporary interruption to an uptrend, which takes the shape of two converging trendlines. Both trendlines are slanted downward against the trend. During this time, bear traders attempt to overtake bullish traders, but at the end of the battle, the bull camp triumphs as the stock breaks above the upper trendline, signaling a continuation of the previous uptrend.
So, what’s the opportunity for traders in Real Goods Solar’s bullish Continuation Wedge?
On June 4, Real Goods Solar closed at $2.37. The bullish continuation Wedge pattern carries a target for RGSE stock of $4.40 to $4.80, which is expected to resolve in just 43 trading days.
At the most conservative target, that’s a potential 85% move in about two months’ time if the pattern plays out. Of course, solar is an extremely volatile sector, so traders should always employ stop losses, which could signal that a bullish pattern has been invalidated. Profit Scanner puts a tight stop for Real Goods Solar at a close below $2.13.
On the bright side, while there is significant support for Real Goods Solar stock at $2.30, there is not significant resistance until the $4.30 level, so RGSE may not encounter any roadblocks as it moves.
Real Goods Solar’s July options chain carries some significant open interest, so speculative traders may wish to explore July calls as a surrogate for a bullish move up.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.
Source URL: http://investorplace.com/2014/06/trade-day-real-goods-solar-rgse/
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