3SOF

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
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= 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 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