Bulls Emerge
The market had another horrendous week, but not us. Last Friday we went bearish and loaded up on inverse etfs. Every trade closed with gains and we are mostly cash. The momentum today should carry over into next week, but the bears will likely feast again. More economic data is due, and unlike today's GDP it should take the market lower starting Tuesday.
The U.S. GDP for the second quarter was revised today. Last month expectations were for a 2.4% increase. Analysts revised their estimate down to 1.4%. The actual number was 1.6%. Experts have already lowered third quarter estimates. JPMorgan and Roubini call for less than 1%, Rosenberg projects negative, and Deutsche Bank thinks it will be 2%. Bennie and the Fed did not say anything important this morning, and the drop was a stop buster nothing more.
The weekend video will be out tomorrow and we have plenty to highlight. Oil and silver are looking strong. Also, bonds are looking weak. Volume has started to come back into the market. The bulls needed to make a stand today, they did.
The Chart of the Day
SunPower (Nasdaq: SPWRA)(CHART)
moved 12% higher.
SunPower was incorporated in 1985 and is
headquartered in San Jose, California. The company manufactures
high-efficiency solar panels which generate up to 50% more power per unit
area than conventional solar technologies. Products are sold at a premium
price through an extensive network of third-party dealers. SunPower has been
the market leader in the U.S and aggressively expanded its market to Europe
through the March, 2010 acquisition of SunRay, a European solar
company.
The purchase has already added 1.2 gigawatts to the company's project
pipeline and about $400 million to revenues this year. However, since the
$300 million acquisition of SunRay, long-term debt has increased more than
50%, to $900 million. A higher debt ratio may have caused some concern among
investors and led to the recent downward trend in share price.
Compared to its peers, SunPower has the most efficient solar panels and
systems on the market. The company recently announced that it has produced a
full-scale solar cell with a sunlight-to-electricity conversion efficiency of
24.2 percent. This is a new world record for large area silicon wafers, and
was confirmed by the U.S. Department of Energy's National Renewable Energy
Lab (NREL).
Shares now trade at bargain price of
$12 after hitting a 52-week low of $9.61. Today
shares moved higher after an upgrade and volume dramatically increased. The
50 day moving average is the first target around $12.90. Beyond that shares
should make another attempt to get above $14 resistance, or 30% higher from
here.
Watch List
The
TradeMaster Daily Stock Alerts' watch list was higher
today.
Leading the way higher was China Power Equipment (Nasdaq: CPQQ), Approach
Resources (Nasdaq: AREX), RINO International (Nasdaq: RINO) and Borun
(Nasdaq: BORN).
