Seeking Light from the Solars

The top five issues up in Friday's trading were solars. Having at least some solars among the day's highest performers is not uncommon, and they often enjoy double-digit percentage appreciation. The question is: How can one predict which will perform next?


This list of solars dramatically show solars are indeed extraordinary performers as they rebounded off their lows in early March. All but two had their lowest lows in March, and those two (FSLR and SPWRA) were lower in November of last year. This, then is a remarkable performance in three months, and appears to be continuing.

SOL, up 15% in one day, has a number of days of performance over 10%, as shown by the ROC(1) in the top band. In the trend starting May 26, it has move up 2-3 days, taken a pause day, then resumed its climb. That would indicate a possible pause day Monday or Tuesday, potentially allowing one to prepare to take a position early the following morning.

However, this channel of SOL's performance of this short-term trend shows prices near the upper channel line, so SOL may go into a correction, if it hasn't already. One would be better served perhaps by awaiting another approach of the lower channel line it has honored in the past three dips during this trend.

CSUN shows a channel since its March, with its current position in the middle of the channel rather than close to a top channel line. Further, it has just moved above its 200-day moving average on increased volume. It also appears to be coming out of a moderate Bollinger squeeze, another bullish indication.

However, the 60-minute graph with a short-term channel shows CSUN at the top of the channel, indicating at least a pause day before it resumes. On this short-term graph a pause day may take price down to the center line, or two days, to lower channel line.

APWR, the third highest performer since its March bottom, was the bottom-most performer of the day. It is in a short-term correction, so may be approaching a buy point. It closed at 13.19, while the upper channel line appears at 16 and rising.

APWR's 60-minute graph indeed shows it near the lower channel line, perhaps a day away, or even close enough to touch it in early, even pre-market, trading, then turn upward. The lower channel line is within one point, while the upper channel line is rising toward 17. APWR, once it turns, provides the best reward:risk ratio, especially if it touches the lower channel lines. One can even set a limit order to ambush it should it touch, then set a stop-loss order under the lower channel line for a very small risk.
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These channel lines are drawn as parallels to a linear regression line through the period shown, so confidence is high. A linear regression is a mathematically constructed line through a series of price points that splits the prices precisely, and indicates an overall trend for the period.