Is this solar stock flying too close to the sun? Some thoughts on Yingli Green Energyi (YGE). (March 05, 2015)
I want to look at solar; specifically in this Free Chart video at Yingli Green Energy ( NYSE:YGE ). I don’t know why but whenever I see this I think of green tea; it’s probably because of the name Yingli. Anyway, the reason we’re looking at this is solar stocks just generally popped today; some great earnings by some companies, and so we’ll look at Yingli ( NYSE:YGE ) here. This was in a squeeze, been in a basing pattern here for a while, it was in a squeeze, finally just today, the stock popped out of this squeeze on massive volume here.
So here’s my suggestion, the stock’s up 10 percent today, that’s 22 cents, it’s a really, really super cheap stock. But the way this thing is trading and it’s got fairly high short interest here with a short interest ratio of almost 12; meaning it would take almost 12 days for the shorts to cover if they were the only ones buying, so it’s going to take a long time for the shorts to cover.
This is not a stock that you want to be short, right? This is a stock that if you were short you’d look at this and say, “For crying out loud, I’ve got to get out of this before I lose my shorts.” The bottom line is, there’s a lot of reasons for this stock to be going up, because nobody wants to be short the stock. I think, actually, as long as you’ve got some method of risk management, in other words don’t just pile in. I think you can buy this stock, even though its up 10 percent, and take advantage of this short squeeze.
If you buy it here, even if the stock moves up to 275.00 or maybe even up to the 200-day moving average that’s like an 18-20 percent return on your money. Again, use some risk management because the stock could be down 11 cents tomorrow, now all of the sudden it’s given back half of it’s gains. So use this type of a turnaround, use this type of a volatility squeeze, and a breakout of that squeeze to give you some confirmation that you’re actually right to be long this stock. You could actually look at some other steel stocks that are showing you the same thing, but that’s for a different day. So here’s a trade on Yingli ( NYSE:YGE ) that I think will work for you.
Free Chart