Canadian Solar Inc. (CSIQ:NASDAQ)
Price at Preparation: $19.87 (June 3rd, 2024)
What they do
Canadian Solar Inc. (CSIQ:NASDAQ) is a Canadian-based solar technology and renewable energy company that engages in the manufacturer of solar photovoltaic modules, provision solar energy and battery energy storage solutions, and a developer of utility-scale solar power and battery energy storage projects with a geographically diversified pipeline in various stages of development. It operates through two segments: Recurrent Energy, and CSI Solar:
- Recurrent Energy is vertically integrated and has expertise in greenfield origination, development, financing, execution, operations and maintenance, and asset management.
- CSI Solar consists of solar module and battery energy storage manufacturing, and delivery of total system solutions, including inverters, solar system kits, and engineering, procurement, and construction (EPC) services.
Welcome to this week’s Theta Bandits: Top Pick Tuesday. We strive to bring you free content, searching the markets to get ahead of what we think could be new potential winners for your portfolio.
Opinion
In recent weeks there has been a softening in the price of Oil with WTI (West Texas Intermediate) dropping from the 80’s to the low 70’s and this has been reflected in the Oil sector. The market is always a balance and when one goes down, there is usually something to counter the move. At the same time, it has been noticed that Canadian Solar, Inc. (CSIQ:NASDAQ) with its solar / renewable energy is one such company. Currently the stock is moving up off a recent 52-week low of $14.11 USD but is still 52% off the 52-week high of $41.51 USD. The analyst ratings have a very wide range for their 12-month Price Target (PT) as follows:
- Low: $9.10 USD (-54.20%)
- Average: $24.15 USD (+21.53%)
- High: $43.00 USD (+116.41%)
A caution against the low PT, which is very scary and a good reminder that market predictions are never 100% accurate and it is prudent to ensure this trade fits your personal risk profile before proceeding. However, as pointed out above there is a catalyst for a potential move in the stock, the question becomes how to take advantage of the move?
Plan
Using the visual aid below, the following colours are used:
- Blue: 52-week high.
- Red: 52-week low and a potential cut target.
- Green: 12-month PTs (low, avg, high).
- Orange: Support/resistance lines.
- Yellow: Our potential plan targets.
The 52-week high and 12-month high PT are pointed out as information and could play a part for those looking to keep the trade for a longer timeframe. Instead, focus on the visual aid in yellow, where there is “X” marked “Target zone” – looking left the previous price movement shows a struggle around this area and this has a high probability to repeat itself and where it would be good to exit the trade with approximately +25% to +30% from the current price. Any further upside should be considered a bonus.
The second “X” marked “Secure profit” is on the average 12-month PT value. This would be a +21.53% move from current prices and a great spot to secure partial profit and reduce the risk on the trade.
If the price falls to the “cut” support line marked in red, this would indicate the trade has gone the wrong way through multiple support levels and to potentially time to cut losses and move to the next trade idea.
For more content consider our Theta Bandits Discord community, a hub for traders to ask questions, share ideas and strategies for this and other tickers daily. Traders in this community have explored similar positions using methods discussed here and in previous Top Pick Tuesdays.
RISKS
The goal is to grow capital by securing profits and limiting losses. Make sure to plan your trade within your risk tolerance, allowing time for success while updating limits and exit points to mitigate risk.
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Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
