Together with two other solar stocks we recommended selling this one back in March 6, 2014, pretty well a year ago to the date. It was at $41 at the time. Then just last month it hit the 62% retracement mark and had completed a textbook correction. WE were asleep on this one but did recommend buying FSLR, more on that later.

The beauty of EW, unlike nuclear physics, you do not need to understand the whole thing, all you need to do in many cases is recognize the last pattern for what it is. In this case a completed correction!. You also know that after a completed correction the stock must go up, most often to the level of the b-wave in the correction. In this case that is at about $40. That is quite a bit so you may not want to take the risk, then just assume that you will get a minimum of 38% of the drop or about $10 (which, by the way, amounts to a 50% return in a single month!)

So we looked at FSLR instead. Here is the chart;

Also please look at the previous blog that explains the present position much better. Here too we were asleep at the switch letting the first $9 slip by, but still we are up $12 on $49 which is 25% in less than a month. We are optimistic that this stock has a lot further to go but for the moment it is a little overbought looking at the RSI. But then the b-wave is at $72.

The usual then and now charts;

We were a little early, but still it is nice to triple your money. Of course we would have done better going Canadian with CSIQ. We lacked the IQ but we do have an installation on our roof using the Canadian solar panels and it provides a 12 % , bond equivalent return. Here is the chart;

Canada’s on-off approach to solar, in particular the domestic content part, may have caused undue fluctuations in the acceptance of this “green” alternative. Another good example where government intervention destabilizes the markets.