Started buying back solars today, with FSLR at $125. In general, I will be buying solars when TAN (solar ETF) is below its 200dma (now at about $8, an important support/resistance line), and selling above that line. All buying, selling, covering and shorting will be done in widely spaced increments, given the extreme volatility of this sector, and with only a fraction of my portfolio.
If TAN gets far above its 200dma, I might consider shorting the solars with the weakest fundamentals.
I still think this industry is going to go through a period of excess supply (resulting in module prices falling to marginal costs of production, falling profits, and falling stock prices). This has been masked so far, because so much production is "non-bankable", so the "bankable" producers can maintain prices even in an environment of oversupply. It can't last.
equity, % decline from 2010 high to today's low, month of 2010 high:
FSLR 20% October
LDK 28% October
TSL 31% October
JASO 31% October
TAN 37% (solar ETF, January)
FAN 38% (wind ETF, January)
YGE 47% January
SPWRA50% January
STP 60% January
CSIQ 61% January
The stronger stocks went above their January highs in October. LDK looks good on this list, only because it was priced for bankruptcy earlier this year (I still think the banks will end up owning it).
Investment-grade solars, in this order:
FSLR, TSL, YGE, JASO
Shorting candidates:
LDK, SPWRA, STP, CSIQ
TAN:
Eric: I don't always respond to your many posts, but I greatly appreciate the effort you make, to post useful info. Thanks. |
