These guys are flirting with bankruptcy, unique for a Chinese company. We are not sure how to count this but we are sure that it does not matter, not after you drop from $90 to 60 cents on the ADRs. FSLR has had equally dramatic move, see elsewhere in this blog. What happened? Did the sun stop shining?? No. Governments around the World wanted to be “green” so they decided to rig the market such that something that was not at all economical, becomes very economical (for some, as the laws of physics cannot be changed). Then they threw “local content” into the equation and voilà a big expansion of manufacturing was stimulated into existence. Then they, the governments, rather abruptly recognized their follies and cut their subsidies, that is the price at which they are willing to buy your electricity, the so called feed-in rate. That is why, or at least one reason why some of these companies are in trouble.

In Canada we have the Micro-fit programme. Micro because it is for the little guy with about $50,000 max to invest, and fit for feed-in-tariff. Google micro-fit and you will get tons of information. You need a rooftop that is of a certain size and facing the sun for a good part of the day. The tariff is now 54.9 cents per kilowatt-hour down from about 84 cents in the beginning, but the costs have come down equally fast. A 5KW system can now be bought for $25,000 including HST and fees for connecting and permits. This would generate about $3,400. per year but that degrades by about 1/2 to 1 % per year, which should work out to a yield of about 10% per annum or better, good for 20 years, government (Ontario Power Authority) guaranteed.  Here is one of the better companies in this business;

They are happy because what they lose on a bank deposit they make up on their Micro-fit installation. Unfortunately you can only go to about $50,000 now.

You may, or you may not own this stock. It had not yet reached the ideal target of $4, nor the suggested entry point of $4.50, but the big picture was clear enough. Two counts are possible here, the black and the green. The one in black suggests the entire move is done which would imply that this relief rally has legs. If the green count is operative there should be one more dip that might actually get to the ideal $4 target. In the big picture this remains a hold for higher levels. (see previous blog).

This just happens to be the biggest bank in the Euro area. It gobbled up the likes of ABN-AMRO, albeit only briefly, and a whole slew of other banks or finance companies. Originally it hails from the Santander region of Spain. In terms of building headquarters these guys out spent most of the competitors.

When they say buy when there is blood in the street this is what they mean. The stock is trading at a P/E of 6.7 and yields 20.6% and it may just get a little better than that over the next few weeks. The magical number seems to be $4, and should it get there it will be the third time in less than ten years. Then when it bounces it moves quite impressively.

From an EW perspective the pattern is a large A-B-C X A-B-C , which is simple an A-B-C, except that the details differ. Theoretically the ideal target would be $4 or a little below. Presently we are either in the 5th wave of a thrust out of a triangle (having already completed the triangle measurement), or we are in a “wedge” type of structure with very little left to go down. Today’s low, so far , was at $5.52 or about a single dollar above the lows. A buy at $4.50 would only be suitable for those that are willing to loose it all, but it is exactly those people that become rich.