Tuesday, January 27, 2009

When Will SunPower Corp, First Solar Inc, LDK Solar Co Ltd, and JA Solar Holdings Co Ltd Start to Deliver? (FSLR; JASO; LDK; SPWRA)

From Schaeffer's Research:

Alternative energy stocks were among the leaders yesterday afternoon. While those gains faded into the close, I thought it was worth checking back on a few of the more well-known stocks - SunPower Corp (SPWRA), First Solar Inc (FSLR), LDK Solar Co Ltd, (LDK), and JA Solar Holdings Co Ltd (JASO).

This is a group that was discussed back in mid-December. The point made then was that the stocks had moved from a downtrend to a sideways base. It was also noted that there was some potential buying demand sitting on sidelines. The updated graphs below show the recent action with the day of the last post highlighted by the vertical line.

A point that immediately jumps out is that volatility still reigns supreme here. For example, JA Solar Holdings went on to rally to a maximum gain of 59% from the time of the original post. However, the current return from that post until now is a loss of 25%. Shares of SPWRA also went on a similar ride with maximum gain of 33% and a current loss of 16%.

The volatility makes trading these stocks extremely difficult as timing becomes everything. While that is more or less true of all stocks, the situation is intensified here. The difference of a few days could be the difference between a big loss and a big profit.

In terms of the overall performance, First Solar stands out for its resiliency. While SunPower, LDK Solar, and JA Solar have drifted back toward their November lows, shares of FSLR have remained in a short-term uptrend....MORE

Chart via Yahoo Finance:

Six month relative performance vs. the Russell 2000:

Chart via Yahoo Finance

Chart for RUSSELL 2000 INDEX (^RUT)