I’ve mentioned before, first day initial public offerings are favorite trading candidates for me. There’s no resistance above the highs they make, and they often provide clean trading patterns.
Today, CSUN – China Sunergy was one of those IPO’s that traded a pattern I’d like to find every day.
Using a 15-minute chart cuts out some of the noise. There’s a combination buy signal on the eighth candlestick. You’ve got a NR7, and a classic buying pattern. Risk – R is less than a dime here, which is excellent reward/risk. Aggressive traders would place a stop under the seventh candlestick. Conservative online trading would dictate placing the stop under the day’s low. CSUN was pretty non-stop from that first entry point.
