(This is an excerpt from an article I originally published on Seeking Alpha on September 23, 2012. Click here to read the entire piece.)
Over a month ago, I claimed that First Solar (FSLR) is just a trading stock, meaning that sentiment would primarily drive the stock and both bears and bulls would find great setups to trade. In this time, the stock has gone essentially nowhere but it has gained as much as 28%, lost all those gains and then jumped up 33% before stalling again. These quick moves are certainly not for the faint of heart, but they confirm FSLR’s station as a trading stock, especially with the stock neatly bouncing between key moving averages. The chart below reviews this action including some major highlights for FSLR since April. Note how recently the stock has twice met stiff resistance overhead from the 200-day moving average and found support from the 50DMA twice since august earnings launched the stock from that support.
Click for a larger view…
Source: FreeStockCharts.com
Working in FSLR’s favor has been the on-going rally in the S&P 500. {snip}
The one positive about FSLR’s rally has been it occurred despite a steady increase in short interest. {snip}
{snip} I fully expect FSLR to make at least one more 20%+ swing (either up or down) in the next month given the current setup.
I also still think FSLR presents major upside opportunity if it manages to survive in the coming year. {snip}
Regardless, whether you are bearish or bullish on FSLR, I continue to expect the stock to provide each camp profitable setups in the coming weeks…{snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on September 23, 2012. Click here to read the entire piece.)
Full disclosure: long calls and puts; short puts on FSLR