Is the sun still shining on First Solar (FSLR)? Maybe for one more day. (December 07, 2017)
FSLR TAN FSLR
I want to look at First Solar ( NASDAQ: FSLR ) here. I am just following up on this. First of all, just the upshot, I don’t think it is too late to buy. I think it is late but this has some upside momentum so I don’t think it is too late to buy.
Let’s start here with solar stocks, there are not that many of them here. Just a few, really, that are worth looking at. The TAN ( NYSEARCA: TAN ), sell-off, consolidation just for a few days and then finally we are back up here. This looks like a lot of the high flying stocks, where it fell to the 50-day moving average and it is moving up. The takeaway here is, okay we got the pullback, buyers stepped back, let this fall. But then finally, “Okay, I want to buy this stock now. I want to buy this ETF, whatever the case may be.” And so they step in and take this stock. This is what buyers do at the 50-day moving average.
Now we go back to First Solar ( NASDAQ: FSLR ); you see First Solar ( NASDAQ: FSLR ) never even fell that low. This is what the stock looked like before they reported earnings. It had been consolidating a little bit higher than you would like. We like these consolidations, these tight squeezes right around the 50-day moving average. These are the ones that work because the stock can move and it is not extended yet, it is just starting to move.
But when the squeezes start at a higher level, if the stock moves just a little bit, then it is really extended and you need to be careful. It just needs to have a lot of momentum in order for you to buy it confidently, right? So the company reports earnings, the stock opens up and starts trading higher but it is still in congestion. This day you look and the stock is right up, it actually blasted through where it was on Monday the 27th. And then today you get a continuation.
Now, the stock is up three days in a row on heavier than average volume and that is important to keep in mind. It is not going to go up every day. If you look at the way the stock is trading, it broke out today and then it stayed up all day long and it closed right at or very near the high of the day.
So the deal is, if you are a momentum trader you buy this stock now and then put a stop, I wouldn’t put it too deep because from this level if it pulls back then this three day bout of buying is over and you are probably going to get some more profit taking so you really don’t want to in that stock. But this breakout does have potential.
So if the stock is up tomorrow, you are buying the stock, just starting a position; by the way, if you already own the stock hang on to it, but you are starting a position and then you keep a stop maybe $2.00 below where you bought it so you have got your loss contained. On a trend, okay this is up close to where it was back here but this is early 2016, nobody cares. Seriously, nobody cares. This is up at a 52 week high on the weekly chart; strong upside momentum. There are buyers here, there is buying in this stock right now and it probably has further to go.
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