Investing in stocks can be about campaigns. When I say campaigns I mean of being patient, watching and waiting before taking action. Action comes when the market confirms the move with a positive or negative transit of our EBV lines. I first blogged about FSLR back on April 12, 2012 when First Solar had a negative transit falling into the blue, as we say. here
I also wrote a blog post on FSLR on August 20, 2012 with the title – First Solar “Coming Out of the Blue”! (Maybe?). I placed “Maybe” in my title because FSLR was already up 50% for the month of August and experience tells me that stocks after such a big move usually want to consolidate under EBV-3 before the actual positive transit unless there is corporate action, like a buyout, that no one can predict. Well I guessed right, and FSLR fell back under EBV-3 after my August 20, 2012 blog post. So I have been waiting. Yes, waiting for 13 weeks and finally today FSLR finally broke above EBV-3 or as we say – Coming Out of the Blue”. (Also see my Q&A about “Coming out of the Blue”)
Here is our model price chart for First Solar as of November 28, 2012.
First Solar with weekly price bars, EBV Lines (colored lines) and model price (dashed line)
As I have written many times in this blog about investment situations where the equity price of any security, I fish in the large cap pond, transits above EBV-3, I call this “Coming out of the Blue”. “Coming out of the Blue” investment strategy is a very profitable one for those investors, traders who invest when an equity positively transits above EBV-3. Would I place my whole portfolio into this one situation? No! I would diversify in names, industries and even countries. I can only say from experience the one company you least expect will probably yield you the most profit, often times that’s the nature of investing. In other words it’s healthy to have a bunch of companies, as many as possible, breaking above EBV-3 and you will never know which will be the most profitable.
When companies transit above EBV-3, this is a positive sign. There can be a number of reasons for this transit, depending on the circumstances. Also, the positive transit can occur before the positive news is publicly available.
Again my purpose here is not to recommend stocks to my readers. My purpose is the help investors, traders and persons interested in using our Facebook application for security analysis for more profitable security selection.
As always, let’s see what happens!