FSLR, CSIQ, ENER, and LDK all made moves north of +10.00%, breaking through its major down trend, and starting what looks to be the beginning of a major uptrend for solar energy stocks. Usually solar energy stock are driven particularly by the rise in the price of oil, but this news, even if oils goes down may give solar energy stocks a good boost for a little while. ENER moves up +25.00% because on top of the FSLR deal, there are now rumors of ENER being takeover. Interest in solar energy stocks have definitely raised. If you are trying to decide who could outperform who: ENER for the short term would probably beat the others, simply because of the takeover rumors who if prove to be true could send ENER sky high. ENER is currently sitting just below its 50 day moving average just below $13.00. If ENER can manage to break through this resistance and settle above $13.00 or higher this would be a very bullish sign. As long as ENER stays below its 50 moving average, I wouldn't go into ENER. If the takeover rumors are unfounded this could as quickly head back south. ENER is the highest risk/reward ratio right now. I think that both CSIQ & LDK should move along with the solar sector and provide decent gains driven by mostly by other solar stock news. FSLR would be the safest bet, not necessarily outperforming others, but in the long term I think this will be and is the most stable of these 4 solar energy stocks and you should manage to get a stable, slow and decent return. So all depends on the risk factor you are willing to take; here are in order what stocks have the highest to lowest risk reward factor: ENER, LDK, CSIQ, FSLR. My personal choices based on technical analysis in order would be: CSIQ, FSLR, ENER, LDK. LDK seems be trading in very choppy trends. FSLR, once over $145.00 resistance, could easily head to $180.00. ENER if it stands over $13.00, could go as high as $17.00-$18.00 just below its 200 day moving average. CSIQ, could go as high as $20.00 before meeting a bit of resistance, but if goes north of that, it's hard to predict at this time where it could top, maybe $25.00, but this number is just based on my intuition.
Yoel,
ReplyDeleteAfter today's close, do you still stand by your analysis on the above energy stocks. Are you still optimistic on their trend being upwards?
Thanks,
DP
I'm still bullish towards solar energy stocks. It is normal after a huge up day for these stocks to have a pullback. ENER hasn't managed to close over its 50 day moving average today. The major down trend, as drawn in my chart still indicates that its long term trend is down. I wouldn't get into ENER and LDK for now, until they manages to break through their 50 day moving average, which it failed to do today. FSLR, despite being the only stock closing slightly up today, did give up most of its gains which is bearish. I do believe however that this specific sector has bottomed, and I'd be very surprised to see them revisit these lows. Now is just a matter of just either finding a support level to buy from or any other buy signals. For now my advice, for ENER and LDK, would be to WAIT. You may see some support with FSLR around $130-$135.CSIQ has the best looking chart, with a major up trend. I'm pretty confident of seeing CSIQ north of $20.00 within 2-4 weeks, based on the last quick move up it had. It may however pullback to $15.00 before making this move. I think tomorrow we will have a much better idea of where these stocks will be heading. I think for now these stocks will be pulling back a bit and create a support level to where was its last resistance level. I think within 1-2 months these stocks have the potential make a good run up.
ReplyDeleteYoel,
ReplyDeleteThanks for your valueable feedback. I also found this article http://www.schaeffersresearch.com/commentary/trading_floor_blog.aspx?blogid=95058&single=true&c=allfeed
which seems to kind of confirm your observation. By the way, I dont understand what the chart means.
Thanks,
DP
This chart shows the stocks in which traders have taken the most short positions, but has advanced higher despite the high short interest. Basically what the article is trying to say is that these are some of the stocks in which traders wre perhaps overly pessimist. This is now starting to be reflected in their share price, by moving higher. Reality is now starting to set in and things may not be as bad as they looked, therefore you may have some short covering and increased buying interest, causing the price to appreciate.
ReplyDelete