New Chinese solar IPO
update
big mover
Hey BigSully1, how's it going?
I am looking to position into Solar again and have SOL and LDK as my probables.
Solar is looking strong again and many charts are shaping up nicely, lots of earnings coming out in the next few days as well.
SOL is about to break into new highs again and LDK seems to be setting up a nice recovery.
Thanks for highlighting SOL, hopefully you have some?
I'm doing well Aussie, how's things down under?
I only hold a token amount of SOL, I'm usually overly cautious on recent IPO's until they "prove" themselves, usually with at least 2 public ER's before I get in very deep.
But the last ER looked excellent, current ER to be released next Wed. I probably won't add very much, if any, until I see it. You just might convince me otherwise, though.
Good thanks BigSully,
I fully appreciate your risk aversion when it comes to new issues. I took a position in SOL Wednesday, my entry was pre the breakout line identified on my chigh chart as I had a high degree of confidence that the pattern and close support were providing a safe entry.
This is a play before earnings, and as BigSully mentions SOL is new and 'unproven' in terms of delivering the goods.
That said Oil at $125 a barrel certainly helps the alternative energy plays. Friday was a nice pre-earns breakout to new highs. Buying stocks breaking to new highs means you are basically buying strength and leadership.
On my chart I have drawn an ascending channel, if my analysis is correct I anticipate SOL to breakout above the upper chanel 'resistance' line following earnings and continue it's movement using that line as the new ascending support.
I have a stop sitting just below the ascending support line, if that hypothesis proves incorrect.
SOL announce results before the open today. Stock has moved nicely to breakout with volume, Solars led the action today with CSIQ results and positive guidance. I have moved my stop to breakeven point (my entry being $18.18). My plan remains the same.
Pre Market Update:
Results are good and guidance strong. Management seem to have a good strategy with regard to securing long term silicon supply both external and from a currently being built new facility. I am liking the way SOL management are delivering.
Results link:
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-14-2008/0004813158&EDATE=
Financial and Business Highlights
-- First quarter 2008 net revenues were US$123.0 million, an increase of
242.4% from US$35.9 million in the first quarter of 2007, and an
increase of 28.0% from US$96.0 million in the fourth quarter of 2007.
-- First quarter 2008 gross margin was 22.1% compared to 20.4% in the
fourth quarter of 2007.
-- First quarter 2008 net income was US$17.7 million, an increase of
160.6% from US$6.8million in the first quarter of 2007, and an increase
of 1.2% from US$17.5 million in the fourth quarter of 2007.
-- First quarter 2008 basic and diluted earnings per share were US$0.15
and US$0.14, respectively, and basic and diluted earnings per ADS were
US$0.30 and US$0.28, respectively. Each ADS represents two shares.
-- First quarter production output was 66.5 MW, an increase of 29.6% from
51.3 MW in the fourth quarter of 2007, exceeding previously issued
guidance of 62 MW.
-- Silicon consumption rate decreased to 6.3 grams per watt in the first
quarter of 2008 from 6.5 grams per watt in the fourth quarter of 2007.
-- Wafer production capacity is planned to increase to 1,000 MW by the end
of 2009.
Strong reaction to earnings on record volume. Afternoon profit taking (as with most movers yesterday) pulled the price back from the gap up open. A positive to take from that is there is no gap left to fill from that open.
I am still anticipating SOL to move onwards and probabably in the range of the new channel I have on the chart depicted by the Blue and red ascending lines. It hit resistance in the shape of the upper (red) channel and wasn't able to hold up there.
Quote from: AussieTrader on May 15, 2008, 04:18:16 AM
I am still anticipating SOL to move onwards and probabably in the range of the new channel I have on the chart depicted by the Blue and red ascending lines. It hit resistance in the shape of the upper (red) channel and wasn't able to hold up there.
Market is rewarding the actions of SOL management. Huge gain today the attached articles will help explain why ;)
Piper Upgrade to $40: http://www.streetinsider.com/Analyst+Comments/Piper+Jaffray+Boosts+Price+Target+on+ReneSola+(SOL)+To+A+%22Street+High%22+$40Share+After+Strong+Results/3648224.html
New contract: http://www.greentechmedia.com/press-releases/renesola-announces-six-year-525-mw-solar-wafer-supply-agreement-with-gintech-energy-corporation-902.html
Motley Fool Solar article: http://www.fool.com/investing/high-growth/2008/05/14/renesolas-in-wafer-wonderland.aspx
I now have 3 Solar stocks in play - SOL, LDK and SOLF. My positions and comments regarding SOLF and LDK are in the premium portion of our site, so, if you like the SOL play and don't have Premium access then consider subscribing to see what's going on ;)
One of our plans here at 3Stocks is to continue to expand the portfolio choice and value added content available in the Premium area, expect to see more detail on that in the near future.
SOL is hopefully setting up a nice conSOLidation in the upper area of my ascending channel (black and red lines). Ideally that consolidation will be more by time than price i.e. volume shrinks and price pulls back gently (relatively) over a few days as traders digest the previous upward momentum and more people get SOL on their radar. That action then establishes the best setting for continuation patterns to emerge.
My SOL strategy remains unchanged for now.
Quote from: AussieTrader on May 19, 2008, 04:54:55 AM
SOL is hopefully setting up a nice conSOLidation in the upper area of my ascending channel (black and red lines). Ideally that consolidation will be more by time than price i.e. volume shrinks and price pulls back gently (relatively) over a few days as traders digest the previous upward momentum and more people get SOL on their radar. That action then establishes the best setting for continuation patterns to emerge.
SOL gave back 5%+ but volume has shrunk and the ascending red channel line uncannily is providing support. I am totally OK with this price action, it is in line with my plan and I accept that this stock has a high volativity (as do most of the Solars right now).
$40 seems to be the target for SOL based on recent Piper reiteration of targets. Seems they met with SOL in China and think Q2 has upside potential relative to current expectations
http://www.streetinsider.com/Analyst+Comments/Piper+Jaffray+Reiterates+Bullish+Stance+on+ReneSola+(SOL)+Following+Recent+Visit/3688444.html
Technically SOL found support around the highs of May13th breakout day (my black channel) and reversed upwards strongly.
I found but then lost an interesting article comparing and contrasting SOL with CSIQ, showing recent Qtr numbers to be very similar (profit, margins, EPS, valuation etc) I will re-dig that out and look into it in more detail.
I am still very bullish on SOL and like the way the stock is acting in the upper regions of this channel.
Profile:
ReneSola Ltd. (ReneSola) is a manufacturer of solar wafers, which are thin sheets of crystalline silicon material primarily used in the production of solar cells. The Company and its subsidiaries are engaged in the manufacture and sale of solar wafers and related products, which are integrated into photovoltaic cells, the principal component of crystalline solar panels. ReneSola offers monocrystalline wafers in sizes of 125 millimeter by 125 millimeter with a thickness of 200 microns and 156 millimeter by 156 millimeter with the same thickness at customers' requests, which are two of the standard specifications used by most solar cell manufacturers. The Company began the production of 156 millimeter by 156 millimeter multicrystalline wafers with a thickness of 220 microns in 2007. Its customers include global manufacturers of solar cells and modules, such as JA Solar Co., Ltd., Motech Industries Inc., Solarfun Power Holding Ltd., Suntech Power Co. Ltd. and Topco Technologies Corp
Market Cap: $1.45B
Sector: Technology
Website: www.renesola.com
Trading Idea:
Technical Analysis:
SOL is a recent IPO which has been in an excellent ascending trend since making lows around $8 in March. Volatility and volume has increased sharply since Q1 results were announced which led to a channel breakout followed by volatile, but controlled consolidation. The most recent sessions have formed an ascending triangle ripe for breakout and continuation of the trend.
Fundamentals:
The Q1 results were strong and above expectations. SOL management seems to be executing with precision and good strategy to maximize growth and profit.
Q1 results:
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-14-2008/0004813158&EDATE=
Financial and Business Highlights
-- First quarter 2008 net revenues were US$123.0 million, an increase of
242.4% from US$35.9 million in the first quarter of 2007, and an
increase of 28.0% from US$96.0 million in the fourth quarter of 2007.
-- First quarter 2008 gross margin was 22.1% compared to 20.4% in the
fourth quarter of 2007.
-- First quarter 2008 net income was US$17.7 million, an increase of
160.6% from US$6.8million in the first quarter of 2007, and an increase
of 1.2% from US$17.5 million in the fourth quarter of 2007.
-- First quarter 2008 basic and diluted earnings per share were US$0.15
and US$0.14, respectively, and basic and diluted earnings per ADS were
US$0.30 and US$0.28, respectively. Each ADS represents two shares.
-- First quarter production output was 66.5 MW, an increase of 29.6% from
51.3 MW in the fourth quarter of 2007, exceeding previously issued
guidance of 62 MW.
-- Silicon consumption rate decreased to 6.3 grams per watt in the first
quarter of 2008 from 6.5 grams per watt in the fourth quarter of 2007.
-- Wafer production capacity is planned to increase to 1,000 MW by the end
of 2009.
Piper Jaffrey have a $40 price target for SOL and from recent meetings reiterated that guidance with positive Q2 upside potential.
http://www.streetinsider.com/Analyst+Comments/Piper+Jaffray+Reiterates+Bullish+Stance+on+ReneSola+(SOL)+Following+Recent+Visit/3688444.html
As with most Solar stocks we have high growth possibilities combined with high volatility, we need to be prepared for volatility to ensure we allow this trade to work for us. A profit target and stop will be updated at the next session.
Trading Plan:
Buy SOL at or around the open
Trading Plan:
Buy SOL at or near the open
Which Solar Stocks Will Continue To Shine?
about stocks: CSIQ / FSLR / JASO / LDK / SOL / SOLF / SPWR / STP / TSL / YGE
http://seekingalpha.com/article/80423-which-solar-stocks-will-continue-to-shine?source=yahoo (http://seekingalpha.com/article/80423-which-solar-stocks-will-continue-to-shine?source=yahoo)
Thanks for the info Se7en. Personally I use Seeking Alpha a lot and have no hesitation in recommending anyone to do the same. Obviously the guy likes TSL but makes a nice case for Solar's overall.
Update:
Friday's session was quite bloody. A combination of factors; OIL - weekly oil inventories reported by the Energy department dropped 1.5% and a Morgan Stanley analyst predicted oil may hit $150 in weeks. Plus the US employment report showed unemployment up 0.5% to 5.5% in May. Not many stocks survived the downside impact of these catalysts as oil surged to $139 area. Generally the relationship is oil goes up stocks go down.
SOL ran up from the open probably due to the correlated way solar stocks have been trading relative to Oil prices, but it quickly succumbed to the bearish market sentiment along with most other shares. Solar stocks have a higher degree of volatility than your average stock and as mentioned when we opened the position we need to allow for that to extract the potential from this trade. Technically it has not damaged the layout and still remains comfortably in the ascending channel and support zones.
We won't set a hard stop just yet, solar stocks in particular can play havoc with stops due to their volatile nature, but we are watching the ascending channel and 50 day MA zones as key support on this current pattern. With upside potential towards $40.
Trading Plan:
Hold SOL
Update:
All solar stocks took a hit yesterday; SOL unfortunately for us was the leading offender! As mentioned before solar stocks have high volatility, a stock that can run up 10%+ in a day as well can do the same to the downside. Technically the ascending support was lost but support found in the 50MA zone plus the early May breakout level (which we identified previously as the area of key support). The bottoming tail action confirms the support found here, but it will be critical for this trade for that support to hold. We are down 15% in a few days (great start Aussie thanks!!).
On a global level interest rate rise fears and Chinese lenders being told they have to reserve a record amount of money to curb credit growth have sent a chill through markets and China in particular. This will no doubt set the tone for China ADR's here in the US and for us SOL in particular. An interesting news link;
http://www.iht.com/articles/2008/06/10/business/10marketsfw.php
Fundamentally nothing has changed, so our reasons for initiating the trade are still intact, however that said it must hold this key support zone, if it cannot we will exit the trade to preserve capital. We will introduce a safety exit strategy today.
Trading Plan:
HOLD SOL with Stop at $18.95
I just bought SOL at 19.45.
poli
Quote from: poli on June 10, 2008, 11:11:37 AM
I just bought SOL at 19.45.
poli
Well done Poli, I think you may have some good timing here ;)
Update:Although Solar and China and the market in general has been selling off. There is another factor at play with SOL and that is the recent announcement that SOL were to sell 8.15M shares to raise growth and expansion capital etc. Now we were aware of this prior to our SOL position (it was announced 30th May). The market showed no real negative reaction to the news at the time and Sol assumed their value at $24.35 for the purposes of income they would get. Based on their SEC filing they have not yet started selling the shares into the market as the registration does not yet have an effective date? I can't ascertain when that selling contribution will start, maybe it already has and the effective date will be filed retrospectively).
Attached you will find the SEC filing.
http://www.sec.gov/Archives/edgar/data/1417892/000119312508129626/df1a.htm
Anyway, we entered when we did for excellent technical reasons, now we must preserve capital with our stop.
Timing in the stock market is everything!
Trading Plan:HOLD SOL with Stop at $18.95
Update:
A new supply contract was announced for SOL, see attached link:
http://www.istockanalyst.com/article/viewarticle+articleid_2278579~title_ARISE-Technologies-Signs.html
I said before timing is everything, sometimes timing is good other times not so good. A combination of factors has made my SOL timing in the not so good category.
I fully expect a tiny bit of volatility will hit our stop, however I hope not.
The market will now decide.
Trading Plan:
HOLD SOL with Stop at $18.95
I think (and hope) the offering is already taking place and the 17th they will announce the pricing, if not and it still has to begin, there will be a lot more downside imo.
On yahoo there was some talk that 6mil shares of the offering were already sold ...
Renesola ignores challenging market to launch follow-on
By Anette Jönsson | 11 June 2008
http://www.financeasia.com/article.aspx?CIaNID=78008 (http://www.financeasia.com/article.aspx?CIaNID=78008)
SOL stopped @ $18.95
http://www.sec.gov/Archives/edgar/data/1417892/000119312508129626/df1a.htm (http://www.sec.gov/Archives/edgar/data/1417892/000119312508129626/df1a.htm)
Oh man, I just found out that my stop limit order did not execute on TDAmeritrade.. Damn it. Now I am 30%+ in loss in this position. What a disaster! During the past month all I've been seeing is the consistent decline in my account value....
Quote from: berloga on June 12, 2008, 03:07:33 PM
Oh man, I just found out that my stop limit order did not execute on TDAmeritrade.. Damn it. Now I am 30%+ in loss in this position. What a disaster! During the past month all I've been seeing is the consistent decline in my account value....
Berloga, if you indeed had an order in with TD Ameritrade and you think it should have executed you should contact them to dispute the order. I had such an occasion a week or so back and had an order reinstated that should not have been transacted.
ReneSola Announces Pricing of Follow-On Public Offering on the New York Stock ExchangeWednesday June 18, 6:22 am ET
JIASHAN, China, June 18 /Xinhua-PRNewswire-FirstCall/ -- ReneSola Ltd ('ReneSola' or the 'Company'), a leading global manufacturer of solar wafers, is pleased to announce further details of its follow-on public offering of American Depositary Shares ('ADSs') (the 'Offering').
Details of the Offering
A total of 9,000,000 ADSs, each representing two shares of the Company, are being sold in the Offering at a price of US$20.50 per ADS.Of the ADSs to be sold in the Offering, 8,577,220 ADSs represent new shares being issued by ReneSola and 422,780 ADSs are being sold by certain selling shareholders (the 'Selling Shareholders'), including certain directors of the Company, further details of which are set out below. In addition, the underwriters have been granted a 30-day option to purchase up to 972,720 additional ADSs from ReneSola and an aggregate of 377,280 additional ADSs from the Selling Shareholders to cover over-allotments.
The Company's ADSs will be traded on the New York Stock Exchange under the ticker symbol 'SOL.' The ticker symbol of the Company's shares on the AIM market of the London Stock Exchange ('AIM') will remain 'SOLA.'
Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are acting as joint book runners and Piper Jaffray & Co., Lazard Capital Markets LLC and Oppenheimer & Co. Inc. are acting as co-managers for the Offering.
The underwriters expect to deliver the ADSs to purchasers on or about 23 June 2008.
ReneSola's registration statement relating to the ADSs sold in the Offering has been declared effective by the United States Securities and Exchange Commission. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The Offering is made only by means of a prospectus forming a part of the effective registration statement. A copy of the prospectus relating to the offering may be obtained by contacting Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010-3629, or by telephone at 1- 800-221-1037; or by contacting Deutsche Bank Securities Inc., Attn: Prospectus Department, 100 Plaza One, Floor 2, Jersey City, NJ 07311-3901, by telephone at 1-800-503-4611, or by e-mail at
[email protected].
Separate from the Offering, the Company will issue 28,000 shares to Panjian Li, Chief Strategy Officer of ReneSola, following his notification of exercise of options. The shares resulting from the exercise will be converted into ADSs and sold in the Offering.
Application for admission to AIM has been made for the 17,182,440 new shares represented by the ADSs being sold by the Company and the new ADSs being sold by Panjian Li in the Offering. Admission is expected to take place on or about 24 June 2008, following the anticipated closing of the Offering on or about 23 June 2008.
On closing of the Offering, before any exercise of the over-allotment option, there will be 135,667,472 shares in issue.
I am still in and plan to be for awhile.
poli
Bullish on Chinese Alt-Energy SOL
Posted Thu Jun 26, 02:10 pm ET
Posted By: Jon Kolb
Through its short history, China-based ReneSola, Ltd. (SOL), a manufacturer of solar wafers and related products, has regularly adapted to changing market dynamics. The company is aggressively ramping up its polysilicon and solar wafer production capacities.
Going forward, increased captive generation of polysilicon will improve its cost structure and enable wafer capacity expansions. Globally, rising solar wafer sales, along with escalating crude and long-term supply agreements, should collectively generate significant earnings growth.
Buoyed by these positive factors and impressive results, SOL increased its 2008 production output and sales guidance. Accordingly, with a predominantly bullish outlook and an attractive relative valuation, we initiate coverage of SOL with a Buy recommendation and a six-month target price of $24.25, representing 27.2% upside potential. SOL may be a great long-term investment.
SOL is on a fast track to growth and this is slated to continue as the solar power market has grown significantly over the past decade. According to Solarbuzz, an international solar energy research and consulting company, the annual solar power industry revenue may increase from $17.2 billion in 2007 to $39.5 billion in 2012.
The firm is ramping up its solar wafer production capacity and, in 2008, plans to nearly double its annual production of 2007. ReneSola plans to expand its wafer manufacturing capacity to 1,000 MW by year-end 2009. Accordingly, the company increased its previously issued 2008 production guidance to a range of 330 to 340 MW and 2008 sales guidance to a range of $570 to $590 million.
double bottom??
chart:
Anybody still in?
Trying to find out what happened here.
Had some ruff times and no time to pay attention to my stocks. Quite disasteres I most say... :'(
But on the bright site, my little girl is okay :)
Would love to hear. Did not think annual report was that bad.
Amarens
update:
1)
SOL: Oppenheimer Starts @ Sector Perform; Analyst Notes
Monday , June 30, 2008 08:15ET
Issuer: Renesola Ltd (NYSE: SOL)
Analyst Firm: Oppenheimer
Ratings Action: INITIATE
Current Rating: Sector Perform
Analyst Comments: The firm is waiting for margins to reaccelerate before becoming more constructive on shares.
2)
Zacks Bull and Bear of the Day Highlights: ReneSola, Centennial Communications, Monster Worldwide, Sara Lee and Dow Chemical
Friday , June 27, 2008 06:00ET
CHICAGO, Jun 27, 2008 (BUSINESS WIRE) -- Zacks Equity Research highlights ReneSola, Ltd. (NYSE: SOL) as the Bull of the Day.Here is a synopsis of all five stocks:
Bull of the Day: ReneSola, Ltd. (NYSE: SOL)
Through its short history, ReneSola regularly adapted to changing market dynamics. The company is aggressively ramping up its polysilicon and solar wafer production capacities. Going forward, increased captive generation of polysilicon will improve its cost structure and enable wafer capacity expansions. Globally, rising solar wafer sales, along with escalating crude and long-term supply agreements, should collectively generate significant earnings growth. Buoyed by these positive factors and impressive results, SOL increased its 2008 production output and sales guidance. Accordingly, with a predominantly bullish outlook and an attractive relative valuation, we initiate coverage of SOL with a BUY recommendation and a six-month target price of $24.25, representing 27.2% upside potential.
3)
Solar Names Fall on Lower Spanish Subsidies
Tuesday , July 01, 2008 09:45ET
The Spanish Secretary of Energy proposed a lower than expected 300MW cap on annual solar installations and lower tariffs. Credit Suisse said it would have to lower its EPS estimates which are based on a 750MW cap. Solar industry names are sharply lower at the market's open this morning. Shares of Canadian Solar (CSIQ), Emcore (EMKR -9%), Evergreen Solar (ESLR), first Solar (FSLR), LDK Solar (LDK), JA Solar (JASO), Renesola (SOL), Solarfun Power (SOLF), SunPower (SPWR) and Trina Solar (TSL) are down 4% or more.
Emcore annunced it agreed to sell 2,000,000 shares of Series D Preferred Stock of WorldWater & Solar Technologies Corporation (OTC Bulletin Board: WWAT.OB), together with 200,000 Warrants, to The Quercus Trust, a major shareholder of both EMCORE and WorldWater, at a price equal to $6.54 per share of the Series D Preferred Stock.
oversold chart:
I am still in. Good health and trading to all.
Poli
SOL: Goldman Sachs Ups to Buy from Hold
Thursday , July 17, 2008 08:12ET
Issuer: Renesola Ltd (NYSE: SOL)
Analyst Firm: Goldman Sachs & Co.
Ratings Action: UPGRADE
Current Rating: Buy (from Hold)
Trading Idea
All solars are somewhat in the doldrums these past few weeks, many charts are not looking too great, but others are staring to wake up. I want to have a position in a solar stock that has earnings now and has a chart to match. SOL falls into that category in that technically the chart is setting up for potential upwards continuation.
This is earnings season and I think many solars will report good numbers and good guidance, we all know long term this is a must need technology. SOL have good numbers, last time we traded it we had a bad timing issue, SOL diluted to raise investment capital and that was a catalyst to push the share price down. That financing is now done and they are unlikley to do something similar at this juncture.
The market is very scatty now so I don't want to jump in here too early. This will be a standby trade plan with an entry on the break of the 50EMA which for today means $17.15. The idea being we let the chart come to us to prove it will move in the direction we want.
Trade Plan:
BUY SOL if it trades at $17.15 or above
Standby Trade Update:
Updating entry price.
Trade Plan:
Buy SOL if it trades $17.10 or above
Standby Trade Update:
Updating Entry Price
Trade Plan:
Buy SOL if it trades $17.05 or above
Hi,
I like these type of patterns. They are more or less easy to determine a failure in and hence to set a stop loss.
I also like the fact you're not buying many stocks these days.
After I took the blow this year, I only keep OIS and MUR which I am about even at this moment. Whatever happens to oil prices, consumption grows globally, so profits of oil companies should grow, in my opinion.
Thanks Berloga,
Yes we are buying less because we don't have confidence in the markets direction and conviction, a look to our losing trades confirms that. So we are setting 'traps' as it were to enter us into stocks when they prove themselves on a technical level, plus those stocks we are trying to trap must have some compelling fundamental strength / advantage to warrant our interest (that said there may be occasions when pure momentum will overide fundametal requirements.).
Update:
A case could be made to be aggressive and buy SOL at the bottom area of this pattern, hmmm.
OK, It took me a few minutes to decide; but because we are at the end point of this triangle pattern, failure of the pattern to the downside becomes a more likely outcome, so we will watch and maintain the entry on breakout approach.
Trade Plan:
BUY SOL if it trades at $17.02 or above
Update:
I am somewhat attracted to the buy now approach, but for today will just adjust our entry price on the breakout.
Trade Plan:
Buy SOL if it trades at or above $16.95
Update:
YGE just announced earnings for Q2 and they are goodhttp://biz.yahoo.com/bw/080806/20080806005549.html?.v=1 (http://biz.yahoo.com/bw/080806/20080806005549.html?.v=1)
SOL is at the lower end of this triangle pattern, yesterdays candle was a nice bullish hammer reacting off support. I think it is time to act decisively and enter SOL today. We can construct a good risk / reward play as we are near good support which we can use for our stop protection. I think solars are positioned to start perhaps a new bull phase.
Trade Plan:
BUY SOL at or near the open
Update:
So we now have our position in SOL with the entry yesterday. The change in entry strategy means we can have a tighter money stop if the pattern SOL has right now breaks down. basically we entered based on support rather than entry based on breakout, both approaches work and we use both strategies in our trades.
Looking at the solar stocks as a whole, many are trading at long term support, as more of the sector release earnings and guidance I am looking for that to catalyse a new bullish trend to emerge which would be all the more viable if the general market were to do the same.
I won't put in a hard stop today, but on the chart you can see I have a red line which a close below would signal breakdown for me.
Trade Plan:
HOLD SOL
Update:
My premise for being in solar stocks was that I was looking for the market beginning to reward the growth, profits and opportunity. Now currently that doesn't seem to be taking place, solars as a group are not participating despite some great results being announced. YGE for example announced great results and guidance, but the market is not playing ball FSLR did similar, but they are drifting into long term support.
I have longer term outcomes in mind with the solar plays, but it is tough fighting the tape and so I have to protect against being wrong. SOL will announce their results Aug 19th before the market opens. Technically SOL has closed right in the support zone, making a tough judgement call here. I will hold again today and see how this plays out, but with the way good earnings from solars are being rewarded by the market (they are not) I am sort of being told this might not be the time to be in solar stocks.
Trade Plan:
HOLD SOL
Update:
'Not the right time to be in solar stocks........'
Timing as we know is everything. Last night LDK announced their Q2 results and totally crushed expectations and guidance http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/08-11-2008/0004865614&EDATE= (http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/08-11-2008/0004865614&EDATE=) This has catalysed an upward reaction from the solar sector after hours with LDK up 20% and others joining in. SOL closed at $13.81 but traded up to $14.76 after the close.
OK, so maybe we now get some reward in the solar sector for good fundamentals, growth, profit and future possibilities. Today before the open JASO report, Wednesday before the open CSIQ report. We could see some good moves from solars if the LDK results are mirrored by more and more players in the sector. If this plays out then SOL who report Aug 19th (and I am expecting good results from them) could well see a strong pre earnings run up and show some technical breakout of the trading pattern we have been watching.
Lets watch the next couple days in terms of how the market rewards the sector and how these earnings play out. No change to the trade plan.
Trade Plan:
HOLD SOL
Update:
Indeed the LDK results gave a filip for the solar sector as a whole to rise nicely. SOL and CSIQ were amongst the biggest % gainers, which is probably due to the fact they they are next in line to report. JASO reported prior to the open and results were good, but mixed in terms of profit and revenue, guidance was in line.
Technically SOL traded strongly on decent volume, closely at the high of the day right at the descending resistance of the pattern we have been following. Now CSIQ report before the open today, so if they have something good to show I'll be looking for further upwards price action and for SOL a break of the pattern and a further break of the 50ema ($16.41).
Lets see what happens.
Trading Plan:
HOLD SOL
Update:
CSIQ reported very good numbers, beating expectation and raising guidance, details can be read here http://www.rttnews.com/ArticleView.aspx?Id=683996&SMap=1 (http://www.rttnews.com/ArticleView.aspx?Id=683996&SMap=1) CSIQs stock however didn't match the results gapping down on the open and losing 4% in the day (it has a lot of resistance just above $30). SOL on the other hand was up nearly 5% breaking out of both the triangle pattern and closing above the 50ema, volume was OK. Technically therefore just what we were looking for. The $17 area for SOL is quite pivotal (green line) having been in play multiple times in the past few months.
Now, SOL report on Tuesday so we have a couple days to decide strategy. Because we bought in the low of the triangle pattern we have a nice profit buffer to hold through earnings with if that is what we do. I would like to see SOL consolidate above the 50ema and if possible above $17 prior to reporting.
No change to the trade plan for now, watching the solar sector and SOL to see how this weeks earnings reports will be digested.
Trade Plan:
HOLD SOL
Update:
SOL closed above the 50ema and below the $17 resistance. The days candle is an indecisive doji, which is just a representation of the fact that their is a lot of resistance in play.
Not much to add, we will continue to hold as previously discussed.
Trade Plan:
HOLD SOL
Update:
A few sessions ago I was questioning my timing on being in solar (obviously long term no worries, but shorter to medium term is different). Now we are sitting OK with SOL having closed strongly above the 50ema and $17 resistance zone. The solar sector was strong overall, we have had some very good earnings reports which have catalysed the strength, and on Friday we had the following news;
Two solar power plants will be built in California that together will put out more than 12 times as much electricity as the largest such plant today, the latest indication that solar energy is starting to achieve significant scale.'
http://www.nytimes.com/2008/08/15/business/15solar.html?bl&ex=1219032000&en=1bd6be8f0fed5637&ei=5087%0A (http://www.nytimes.com/2008/08/15/business/15solar.html?bl&ex=1219032000&en=1bd6be8f0fed5637&ei=5087%0A)
Optipower (privately held) and Sunpower (SPWR) are the key panel suppliers for this project, which is being driven by the fact that in California, energy providers must have at least 20% of their supply from renewable sources. This is exactly the scale of project that is going to drive solar companies growth in the future. STP were up 17% on Friday based on the news.
So what of our SOL position? Well, my outlook is longer term, but we are up nicely in a few short sessions and just about to get an earnings report (which based on previous releases the reaction could go either way). A positive reaction puts SOL into the $20's, a negative reaction down to the $15 area.
A quick poll of solar charts shows many reacting nicely off bases and breaking upwards through resistance, a look at TAN (The ETF which tracks the solar sector) reflects that view.
So the trade plan will remain unchanged, we will continue holding SOL into earnings, we have some profit buffer which I am prepared to give back if for some reason the market is disapointed by the SOL release.
Trade Plan:
HOLD SOL
Update:
SOL Q2 results are out and they are way above expectations with strong guidance and excellent management control. Some headline numbers:
Revenue +289% V's year ago
Net Income + 295% V's year ago
Production Output 82.5MW V's 66.5MW in Q1
Margin: Stable V's Q1
EPS (diluted ADS) : $0.38 (consensus was $0.32)
The report is full of good information relating to contracts signed, new wafer facility progress, outlooks etc. Full details: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-19-2008/0004869700&EDATE= (http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-19-2008/0004869700&EDATE=)
So, SOL are over-delivering on their potential and that will filter through to the stock price in the long term for sure. Now we had a 30% or so run from SOL leading into earnings, I expect therefor there will be profit taking today from those who want to lock in those gains. Our outlook on this type of solar play is longer term, so we will continue to hold as I see much bigger returns possible over the coming months from this sector. Technically I would like to see the $17 zone hold as the results get digested by the market, then setting up continuation through the $20s to challenge the all time highs near $30 set in May.
Trade Plan:
HOLD SOL
fyi (from forbes):
ReneSola released strong results Tuesday, but investors seemed only to see dark clouds.
The Chinese manufacturer of solar wafers reported a roughly fourfold increase in second-quarter profit on strong demand and a jump in customer numbers.
But ReneSola (nyse: SOL - news - people ) shares fell 2.5%, or 44 cents, to $17.49 on Tuesday at the close even though other solar stocks rose.
Piper Jaffray analyst Jesse W. Pichel said investors reacted to a change in accounting for a small polysilicon facility. He said the accounting change added 200 basis points to gross margins, making the reported gross margin 24.7% in the second quarter, even though Pichel said the core gross margin was 22.4%, up from 22.1% in the first quarter. "The Street thinks the margins are coming down, but they're not," he said. "The company said the margins will remain stable for the balance of the year."
On Tuesday the company reported second-quarter net income rose to $23.3 million, or 38 cents per American depositary share, from $5.9 million, or 12 cents per American depositary share, in the prior year, beating analysts' estimates of 32 cents per share.
Revenue more than tripled to $173 million from $44.5 million a year earlier, well above analysts' expectations of $141.3 million.
The company reported that expenses for research and development were higher than anticipated, which Pichel says limits the upside for the near term. Total operating expenses in the second quarter increased to $8.3 million, up from $4.0 million in the first quarter of 2008 because of a substantial increase to invest in developing alternative silicon feedstock materials.
Update:
Piper Jaffrey reiterated their buy rating on SOL, lifting the target price to $35.00. THey further upgraded forward looking revenues; fiscal year 2008 revenues estimates to $663.1 million, up from $622.1 million and earnings per share to $1.43 to $1.50. Fiscal year 2009 revenues estimates to $1.2 billion, up from $969.1 million and earnings per share to $2.82, up from $2.42.
Technically we got profit taking, but that was expected based on the pre earns run up. There were also some concerns relating to costs in the report, but from my point of view those costs are for the enhancement of their raw material supply and that for me is a positive move. The price remains above key support and so I remain comfortable with the layout. My belief is that later this year we will be looking at a mid $20's stock price as a normal trading area, that is what I am planning for. No change to the trade plan for now.
Trade Plan:
HOLD SOL
Update:Yesterday was a very interesting session for SOL and other solar stocks.
SOL breakout the previous relative high, trading on heavy and growing volume, the stock is gaining momentum from a technical point of view, and its overall mid-term layout is becoming more bullish.
Another positive research note was published, this time by Merrill Lynch:
Quote
Multiple growth drivers on the horizon
Key growth drivers ignored by investors; Reiterate Buy
Most investors are impressed by its strong earnings growth, but few would
recognize new growth drivers such as in-house polysilicon and metallurgical,
which made us incrementally more positive. We are also encouraged by news
that 60% of ReneSola's '09 production is already booked, reducing much of the
'09 demand risk feared by some investors. We reiterate our Buy rating and PO of
750p. Please note we have introduced coverage of the ADR with a US$30 target.
Strong 2Q08 results consistent with our positive preview
Strong performance of 2Q08 is consistent with our positive preview we published
a month ago, "Stock oversold despite strong 2Q momentum, on 11 July". 2Q08
revenue of $173mn exceeded our bullish estimate of $149mn and consensus of
$141mn. ADR EPS of $0.39 was better than our estimate of $0.33 and consensus
of $0.32 due to rising ASP and improving silicon utilization from 6.3g/w to
6.24g/W.
Polysilicon JV adds c.$0.04 to 3Q08 EPS
We expect the polysilicon JV to generate $5mn investment income for ReneSola
and an additional EPS of $0.04/share. We expect the Henan JV to produce about
75-85MT of polysilicon during 3Q08 and is earning a gross margin of 60%.
Metallurgical silicon provides margin upside
The company announced significant progress in using metallurgical silicon and
the conversion efficiency is satisfactory, according to the management. Little
information has been disclosed but we expect metallurgical wafers will be
significantly accretive to its margin due to its low cost. ReneSola's competitor LDK
had been successful in marketing such product recently as well within a short
period of time.
Consensus to move past our bullish estimate
We expect consensus of $612mn to move past our bullish estimates of $626mn
based on management's new guidance. With higher ASP and increased
production, ReneSola raised its FY08 guidance to $640-670mn from $570-
590mn, on shipment target of 340-350MW from 330-340MW. As such, we still see
upside risk to our Street-high FY08 EPS of $1.45 compared to consensus of
$1.29.
(see attached pdf, for complete note)
Trading Plan:Hold SOL
Update:
SOLF released their results this morning and whilst very good, fall perhaps below expectations which led to their dramatic rise these past few sessions http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080827005483&newsLang=en (http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080827005483&newsLang=en)
Pre market is reflecting that sentiment with profit taking in full swing on SOLF. Once the release details have been fully digested I am sure SOLF will find a range and then an upward bias again.
Now SOLF is not the market leader here, just another good player, but any profit taking it will encounter will reflect in the other solars such as our SOL.
SOL technically has been consolidating after the breakout through $17. I am expecting $17 to now as act as good support as it represents a key area of moving averages and historically relevant pricing.
Trade Plan:
HOLD SOL
let's see if the SOl support will hold :o
cheers
O.
Update:
All solars got the smackdown as oil got hit along with commodities. Nothing fundamental has occured its purely a reaction as a result of the market direction.
In my prior post I talked about the $17 support area and that I expected it to hold. Well SOL is sitting on that zone right now, technically it has a lot of support there, so we will watch that zone and see what happens.
The reasoning for holding solar stocks are still very much in play. No change to the trade plan today.
Trade Plan:
HOLD SOL
Zacks.com
ReneSola LTD: Zacks Rank Buy
Thursday September 4, 1:00 am ET
By Bill Wilton
ReneSola, LTD (NYSE: SOL - News) has raised its earnings by almost four fold since last year. They continue to increase production and revenue guidance as they have recently entered into several long-term contracts. The company is attractively priced with a PEG ratio of .4, well under the industry average of 2.1.
Company Description
ReneSola, Ltd. manufactures solar wafers from raw silicon for photovoltaic cell makers like Suntech Power and JA Solar. The company is headquartered in Jiashan, China where it was founded in 2003. ReneSola carries a market cap of $1.9 billion and has approximately 3,100 full-time employees.
Net Income and Revenue Almost Quadruple
On August 19th, ReneSola announced spectacular second-quarter results. Net income rose 295% to $23.3 million, from $5.9 million in the same quarter last year. The company earned 38 cents per share, easily surpassing the consensus estimate of 31 cents. This was the second consecutive surprise with an average surprise of 19.6%.
Second-quarter revenue was $173 million, a 289% year-over-year increase. RenaSola also saw a jump in gross margin, now 24.7% up from 22.1% last quarter. The increase is mainly attributed to change in accounting, but reduced silicon usage per watt and lower costs also helped. Without the accounting change the margin would be 22.4%.
Plenty Of New Business
ReneSola signed five new long-term contracts in the past couple months. Suntech Power Co. increased the initial four-year 510MW order of silicon wafers for an additional four and a half years and another 1 GW of wafers.
The remaining four contracts range from three to six years and call for a total of approximately 750 MW of wafers to be delivered.
Raising Production and Revenue Outlook
The company has increased its full-year 2008 output to between 340 MW and 350 MW, up from between 330 MW and 340 MW. The increase should produce revenues of between $640 million and $670 million, up approximately $70 million from the previous target.
The Chart
Shares of SOL broke out of a bearish trend toward the end of July and are developing a nice level of support near $13 per share. Take a look at the chart below.
Update:
Nice info from Zacks thanks La-onda.
Difficult update, on the one hand we have seen a nice profit evaporate, but because I had longer term outcomes in mind with this trade we have to be tolerant to that type of fluctuation to be able to hold stocks for more than a few days / weeks.
I am looking for SOL to find its support here, but the terrible market conditions are making that a hard call. Chart shows we should see SOL get that support in the current trading zone. I am prepared to see if it can do that today.
Trade Plan:
HOLD SOL
Hi Aussie,
It seems there has been some correlation to the stock price of the solars with the oil prices. I guess, the logic traders use is "oil gets cheaper, there is less incentive to develop or buy solar based energy products". In this case, we should address the longer term picture in which case it becomes apparent that given oil prices should not drop dramatically, solar should also hold up and eventually grow independently. At some point, when solar market achieves a certain size, the profits of the solar companies should continue growing regardless of the oil prices.
What's your view on this?
Thanks,
Berloga
Hey Berloga, yes there has been correlation like you say, which is crazy when you think about it because solar energy, development and growth are the future whilst oil is the past and the present with a limited future. Solars therefore have been 'traded' in relationship to oil. So I am agreesing with you.
Update:
Now, I have a longer trem view in mind with SOL (also ASTI) and that is why I haven't traded it (that is sold it when it hit resistance) because I am trying to let it run over a longer timeframe. That all said, and as I mentioned previously the overall 'bearish' market sentiment is making that difficult. SOL found some support as I was looking for and the Gov 'intervention' in FRE and FNM have given a huge boost to the market over the weekend (probably short lived) and SOL will likely benefit from that.
My normal PC has some problems and I have lost (temporarily) some applications, so i can't post a chart, suffice to say I will maintain the same strategy and hold SOL. I believe it will maintain an upwards bias (over the longer term) despite the overall downwards market. Reclaiming and holding the $17 zone is the first action I would want it to do.
Trading Plan:
HOLD SOL
???
Market down big, solars also big down today
Update:
The markets are talking very loudly to me, 'it is not the right time for holding stocks on the long side unless you have very short trading timeframes in mind'
Well, more a conversation than a shout. It pains me somewhat, but I will be selling SOL today. Technically the chart is somewhat broken, i do not want to hold and see if the $12 zone will save further bloodshed.
I will look to sell into any strength that may appear. I do expect the market to bounce, but only a short lived recovery.
Time to re-assess our approach and the markets sentiment.
Trade Plan:
SELL SOL
chart update:
Update:
SOL was a highly speculative stock not long ago when it traded near $30... right now near $7 SOL is trading at unbelievable multiples:
Current 2008e EPS estimate is $1.37 and for 2009e is $2.19, this puts SOL trading at just 3.25 times 2009 earnings (!!!), I would say the stock is no longer speculative and is a value play at these prices.
Quoting HansonWestHouse Research from their last note from a few days ago:
«SOL - Heavily discounted against the sector (8 October 2008)
The global solar sector is down by more than 45% in less than two months. In tandem with wider market atrophy, the sector has been shaken by concerns over reduced levels of subsidy in key markets and high levels of debt. We believe that both of these concerns are overplayed given that the new subsidy limits announced in Spain and Germany are considerably less severe than those proposed by conservative elements and the sector is actually modestly leveraged at present. In a peer group context, we believe that ReneSola is in strong position that is not reflected in the company's rating. We believe that this is wholly unjustified and the current share price represents a strong opportunity to buy.»
Despite the huge fundamental opportunity, this is not a fundamental play, on a rebound scenario and solely from a TA perspective, SOL has the potential to reach it's 50-ema or other upside references.
Trading Plan:
Buy SOL today (10% exposure), we'll be setting a stop near yesterday's lows.
We are buying this pick simultaneous for both Portfolios.
Update:
SOL was a highly speculative stock not long ago when it traded near $30... right now near $7 SOL is trading at unbelievable multiples:
Current 2008e EPS estimate is $1.37 and for 2009e is $2.19, this puts SOL trading at just 3.25 times 2009 earnings (!!!), I would say the stock is no longer speculative and is a value play at these prices.
Quoting HansonWestHouse Research from their last note from a few days ago:
«SOL - Heavily discounted against the sector (8 October 2008)
The global solar sector is down by more than 45% in less than two months. In tandem with wider market atrophy, the sector has been shaken by concerns over reduced levels of subsidy in key markets and high levels of debt. We believe that both of these concerns are overplayed given that the new subsidy limits announced in Spain and Germany are considerably less severe than those proposed by conservative elements and the sector is actually modestly leveraged at present. In a peer group context, we believe that ReneSola is in strong position that is not reflected in the company's rating. We believe that this is wholly unjustified and the current share price represents a strong opportunity to buy.»
Despite the huge fundamental opportunity, this is not a fundamental play, on a rebound scenario and solely from a TA perspective, SOL has the potential to reach it's 50-ema or other upside references.
Trading Plan:
Buy SOL today, we'll be setting a stop near yesterday's lows.
Update:
Positive developments in SOL chart, but still inside current trading range. I'm setting a suggested stop level for now.
Trading Plan:
Hold SOL with suggested stop near $6.05