Breakout on Weekly Time Frame, page-7

Warning: Use this information at your own risk.

A Long Term (Monthly Time Frame) Perspective of SUN Based on Technical Analyis

Elliot Wave:
I am not an Elliot Wave expert so my interpretation could be, and probably is, erroneous.

Tentative assertion: On a monthly time frame, it appears like SUN has completed it's fourth wave correction and is starting it's fifth and final wave up.

If this is a fifth wave up then I would like to know how far could it go and how long?

Fibonacci Extensions based on length of First Wave:
This information is taken from eSignal Part 2 "Applying Technical Analyis". Generally, the length of the fifth wave is a function of the length of the first wave.
Possible "End of Wave Five" targets:
1. Low of Wave Four + Length of Wave 1  = $15.235
2. Low of Wave Four + 1.62 x Length of Wave 1 = $18.41
3. Low of Wave Four + 2.62 x Length of Wave = $23.54



Elliott Channels for Top of a Wave 5:
This is a quotation from eSignal Part 2 "Applying Technical Analyis":
"Once the 5th Wave starts, the Elliott Channel Technique can be used to project the end of the 5th Wave. Once Wave 4 has been completed, draw a straight line between Waves 2 and 4. Now draw two lines parallel to the lower channel line connecting the tops of Waves 1 and 3. Expect Wave 5 to end on one of the two upper channel lines. Usually, if Wave 3 was a normal wave, Wave 5 tends to end on the channel drawn from the Wave 3 top. If Wave 3 was extended and a runaway type of wave, Wave 5 tends to
end on the channel drawn from the top of Wave 1."

The chart below assumes the slope of the fifth wave will be similar to that of the third wave (which may be incorrect);



Monthly Moving Averages:
12 month exponential moving average has crossed above 24 month exponential moving average and both averages are sloping up. Bullish indication.


Monthly Bollinger Bands:
Possible breakout above top Bollinger Band this month. Bullish signal if history is any guide.


Resistance Levels:
SUN has broken two major swing point highs on an intra-month basis and is moving up strongly compared to the general stock market. Strong resistance should be expected in the $15 - $16 region. How it behaves when it gets into that region will give a strong clue on how far this rally can go. If it moves through that region strongly then we might get a decent up-leg towards the old all-time high.


Conclusion:
It it is probably worth putting some money on this stock as a medium term trade (1-2 year time horizon). Will depend a lot on general market conditions. It seems to be showing a lot of strength compared to the bearishness of the general market this week. Short term (daily time frame) it is starting to get a tad overbought - might go up a little more then pull back. If it pulls back and does not go below the monthly swing point highs that it has just broken then that would be a bullish sign.