Thursday, June 30, 2011

Dearie Me, It Appears the First Solar Shorts are Under Assault (FSLR)

The stock is up $9.23 at $138.65.
Today's big news is "First Solar (NASDAQ:FSLR): Home run on loan guarantees - Credit Suisse", upon which Notable Calls comments:
...Notablecalls: This is easily the most significant piece of Solar news this summer. These FSLR contracts were signed around 2008, which means the terms are very favourable in terms of pricing vs. today. The DOE loan guarantees provide very cheap financing, which further amplifies the profitability of the projects. The upside could be $5-6 in EPS in 2012/13.

Most analysts were expecting 1 or 2 of the projects to get DOE backing but NONE expected a slam-dunk (all 3) decision we got today.

Solar has been extremely out-of-favour sector evidenced by the whopping 46% short interest in FSLR. I would call this an explosive combo.

I expect FSLR to trade $140-145 range today. Yes, I'm expecting a $10-15 pt move.
I was early with "First Solar: Short Squeeze Being Set Up (FSLR)" on May 26th at $120.55 and with
"German Nuclear Decision: Phase One of First Solar Short Squeeze (FSLR; GS)" on May 31 at $124.75.
Here's the chart:


The June 8 low was a bit scary but as I said in "Thoughts on Markets, Investing and Life":
"The original title of this book was 'Jimmy James, Capitalist Lion Tamer' but I see now that it's... 'Jimmy James, Macho Business Donkey Wrestler'... you know what it is... I had the book translated into Japanese then back in again into English. Macho Business Donkey Wrestler... well there you go... it's got kind of a ring to it don't it?

Anyway, I wanted to read from chapter three... which is the story of my first rise to financial prominence...

I had a small house of brokerage on Wall Street... many days no business come to my hut... my hut... but Jimmy has fear? A thousand times no. I never doubted myself for a minute for I knew that my monkey strong bowels were girded with strength like the loins of a dragon ribboned with fat and the opulence of buffalo... dung.

...Glorious sunset of my heart was fading. Soon the super karate monkey death car would park in my space. But Jimmy has fancy plans... and pants to match. The monkey clown horrible karate round and yummy like cute small baby chick would beat the donkey."
Well there you go. Pretty much says it all.
(okay, that wasn't really me. It was Jimmie James, News Radio -Episode #57 "Super Karate Monkey Death Car by way of
We're looking for an entry to short the entire market, I think it will be today or tomorrow and that up-gap on FSLR looks like a target.

Here's our June 2 post:
First Solar Chartology: Mind the Gaps (FSLR)
The stock is up 83 cents at $120.54.
It still amazes me how many times a stock or commodity will fill the gap on a chart.
I've been at the market for my entire adult life, going back to the days of CycleCharts and other chart books [tell them about the quill pens -ed] and it is one of the basic tenets of technical analysis that still has a statistically meaningful result.

That said, when I was a pup there was an older analyst who would not buy into the 18-year bull market that started on August 12, 1982 at DJIA 776 because of a gap on the Dow's chart dating back to 1973 or '74 in the 590 area.

He died poor and crabby....

...Here's the six month chart showing the gaps at the round numbers, 130 and 140: