Ahhhh, solar.. feel the warmth. What a nasty and sometimes very profitable ride we’ve taken with the solar industry this year. Many fear taking positions in solar thanks to lack of investing from a weak economy. Others love solar because of the global trend to go ‘green’ and the continued support by some governments to support cleaner, renewable sources of energy. Ultimately, green energy will be profitable, but I’m not about to guess when.
In the meantime, I’m looking for some short term trades.. either swing or scalp. Please understand my style – I generally look for breakouts with volume out of technical setups. I love the charts and generally live by them thanks to the short term nature of my positions. Like Kunal, I am also interested in stocks that are oversold and living on support levels. These can often prove to be profitable swing trades and stop losses are easier to define.
Back to solars.
The solars were on fire last week thanks to some strong earnings reports and guidance from names like JASO and YGE. As I’ve mentioned in the past, I really like Chinese solar names over the rest thanks to lower costs of operation and larger governmental support than here in the states. These names include CSIQ, CSUN, JASO, LDK, SOL, SOLF, STP, TSL and YGE.
This week, the market is anticipating more excitement in the solar industry as numerous companies report earnings. The beauty of this, from a trading standpoint, is that we’ll likely see a lot of volatility and swing or scalp opportunities if you stay on your toes.
SOL will be reporting tomorrow, so we’ll likely see some pre-market action (look at all the volume at Friday’s close). However, I’m not participating. I will look at the other solars reporting later in the week and base part of my position allocation on SOL’s numbers. Good start of the week could kick off a week long solar rally.
CSUN, LDK, and SOLF report Wed. CSIQ on Tuesday… and STP / TSL on Thursday.
Quick charts and how I’m trading solar this week.
1 – watch SOL’s action on Monday.. could be the catalyst for lots of speculative buys throughout the day.
2 – Look to position myself into one or two of these by Wednesday…
CSUN – Testing descending trendline resistance and horizontal resistance. A move over $4 tomorrow and I’ll likely take a long swing position and taking 1/2 profits Tuesday afternoon before Wed morning earnings (if all goes well and price moves about $4)
LDK – China’s hardest hit solar stock of late.. therefore a potential runner on industry momo.
TSL – looks good for a swing if Monday’s and Tuesday’s reports look good.
I really like Chinese solar companies and one or many of these will likely move strong this week. Put them all together on a watch list and keep an eye on relative volume and twitter chatter. You can filter the main twitter feed on Bulls for any of these stocks to see who is getting the chatter.. that’s your scalp play, in my opinion.
I’ll have more to say about solar this week, so look for me in the Boom Factory or tweetin.