fslr

FSLR, First Solar update

Hamilton

fslr feb 28 2016 bFSLR feb 28 2016 s

First Solar has worked out well, so far at least. Looking at the big picture we had, and still have, much higher levels in mind for this stock. However, we are approaching a minor double top situation and, as we have said ad nauseam in this blog, it is always smart to step aside at these points in time.

The buy recommendation, we were not very alert, was at $49. Here we are a year later at $73. It should perhaps trade a dollar or so higher but we do suggest selling the stock at about that price. That is a gain of $24 on $49 or 49%, more than you get on your GIC.

The solar technology has a very bright future but the influence of China as a producer and the miserable inept interventions by various governments and their regulators,  make for an irregular path up. Playing it safe is the way to go.

See also TAN, where you should also have exited the trade at the double top level. It may be a buy again soon,

CSIQ, Canadian Solar (on Nasd.), FSLR

Hamilton

csiq 5 mar 2015

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;

fslr mar 6 2015

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.

FSLR

Hamilton

fslr feb 12 2015 log

fslr feb 12 2015 arith

We are not sure if there is indeed a triangle in the middle, the entire thing counts just as well as an a-b-c X a-b-c or double zig-zag. In any event a drop from $320 to $11 have all the attributes of a serious correction so there is no compelling reason to expect any further drop. So both the structure and the magnitude support the notion that we are in a new bull market. Wave 1 went from the low of $11 to almost $75 and then drops to $39 in wave 2 (62%!). We are now in wave 3 which could go to $175 or so.

AAPL just bought $850mln. equipment from this company in order to create one of the largest solar installations in California. This should power all of AAPL’s  needs for the next X years. It is on grid so the local utility is part of the equation.

FSLR , SCTY and CSIQ (not shown)

Hamilton

For more info please review previous blogs. Looking at this trio of solar companies it sure looks like the tide is going out again. Here are two charts;

fslr mar 29 2014scty mar 29 2014

We chose these two because they both sport a very distinct “wedge” formation. In both cases there is some overlap and in the case of SCTY the lower trend line is already broken decisively. On the first chart we think we are looking at a C wave whereas on the second chart it is a 5th. CSIQ is simple overbought. All three are a sell.