Thursday, June 2, 2011

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 15-minute five day chart for FSLR, We are of the opinion that the stock bottomed at $114 and change last week and is setting up to squeeze the shorts, the gap up on Tuesday being an indication of the large short interest (third largest among the S&P 500 components):

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