Insider buying at First Solar (FSLR) continues to mark a near-term bottom in the stock, but the recovery from February’s post-earnings losses has unfolded much more slowly than I expected. FSLR is up 18% since printing a bottom on February 25, the day before FSLR’s CEO and EVP of Marketing & Product Management purchased a combined $1.2M in their company’s stock. The recovery has already stalled out twice before, and it now faces resistance from the recent downtrend, overbought conditions, and the February pre-earnings high. The charts below summarize the technical set-up.
*All charts created using TeleChart: 
Shorts are clearly not impressed with the implications of the insider-buying. Short interest has increased 4.9% in a month and the short ratio has ballooned to 21% of the float. This action surprises me given I have a strict policy to avoid shorting stocks that have insider support. While I closed out my last bullish position in FSLR on Wednesday, I am am not interested in shorting even at these overbought conditions near resistance. Instead, I remain alert for the next buying opportunity. My switch to a bullish bias will last as long as insiders continue to support the stock and no significantly negative news hits the tape.
Be careful out there!
Full disclosure: no positions