Ask The Trader – LLEN, RSOL, & RNA – 14 November 2013

M from North Carolina asks about 3 names…  We generally try to avoid super low priced names, however even low priced names adhere to structural dynamics/chart patterns as long as there is sufficient liquidity.

LLEN — L&L Energy is in a monster downtrend. When price failed to hold support at the 21 August low ($2.13), it was clear the stock was in trouble.  The current drift upwards back toward that area (now resistance) is likely to resolve itself to the downside (see MCP).  Unless price can get up through the area and push through $2.25, we won’t see any reason to change our downward bias.

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RSOL — Real Goods Solar is forming a fairly symmetrical triangle that’s likely to resolve itself to the upside.  We would have a hard stop in just below the rising trendline (around $3.00) if long.  It”s actually not a bad play to enter here with the same stop.  In terms of a target, $5.00 looks like the “easy” money.  After that, it becomes more of a struggle.

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RNA — Prosensa looks like dead money… While it’s entirely conceivable that the stock will experience a dead cat (and that it is basing for just such a move), it seems more likely that RNA will continue to languish near it’s lows.  That said… assuming a reasonable (prudent) position size, the downside from here (in absolute terms) is minimal.  A push above resistance at the yellow line would signal the beginning of a bounce to us.

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Opinions are just that, but we hope this helps M.



The Trader

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