Top Nav

ChartWatch: Solar Powers Ahead

First Solar (NASDAQ: FSLR) still hasn’t been given the praise it deserves. Despite a meteoric rally to end the year, analysts remain bearish.

The majority of them rate FSLR a hold. Meanwhile, the average price target is $23, 35% below the current market price. How are the shares a hold at $35? Analysts are clearly in denial.

Though the Street missed the boat, ChartWatch readers didn’t.

ChartWatch has been a proponent of FSLR since October. In fact, I pointed out the pennant (blue lines) as a bullish development, going so far as to say, “the stock may increase by 50% before year’s end.”

This chart shows the price of FSLR shares along with an important resistance level to monitor.

I confirmed this view in a more recent December article. At the time, the stock was around $27 and I still expected $34 (blue dot).

Only one day into the new year and FSLR has ripped through my price target. So do I think it has more room left to climb? Absolutely.

The $40 area represents heavy resistance and will be a tough price to breach. However, the shares appear ready to at least challenge this zone.

Realistically, $32.50 should support the stock in the near term. And based on the high volume accumulation activity, bullish traders should bid FSLR up to $37-$38. However, this stock is volatile and eventually a larger pullback should ensue, giving long-term investors a chance to buy at a lower price. I’d view any pullback as a buying opportunity, with an entry price near $30 as optimal.

Solar stocks will continue to surprise investors this year and FSLR is the safest stock within that industry.

Equities mentioned in this article: FSLR, TAN

Positions held in companies mentioned above: none

Don’t Miss: ChartWatch: Coal Miners Can’t Heat Up

Strike Price Offer

The Strike Price is your leading resource for insight into the world of options trading. Chief options analyst Andy Crowder will guide you through the best options strategies—telling you exactly where he's putting his money, and how you can make safe, reliable gains from some simple options trades. Your FREE subscription also includes Andy’s report "The One Vital Rule for Every Options Trade"—which reveals the #1 rule to achieve a high win-rate in every options trade.
You've successfully subscribed, click the link in your email to confirm your subscription.
There was an error, and you have not been subscribed, please try again.