I've been doing more research on the solar stocks to see what makes them move. From what I have found on the internet, the key is the polysilicon shortage. Demand and revenues are not the problem, but the margins are... If the polysilicon shortage continues to last beyond next year and continues for a few year then it benefits: MEMC Electronics (NYSE: WFR) - Polysilicon supplier First Solar Inc. (Nasdaq: FSLR) - Thin film solar cell manufacturer Evergreen Solar (Nasdaq: ESLR) - Uses string ribbon technology that uses less polysilicon. Daystar Technologies (Nasdaq: DSTI) - Thin film solar cell manufacturer If we see more supply and prices stabilizing or declining starting next year then it benefits: Suntech Power (NYSE: STP) Sunpower Corp. (Nasdaq: SPWR) Trina Solar (NYSE: TSL) Canadian Solar (Nasdaq: CSIQ) Solarfun (Nasdaq: SOLF) Next week will be pivotal as TSL, CSIQ, SOLF and JASO will be reporting. I expect for revenues and demand to have jumped. I expect the management of each company to have rosey pictures and their figures will most likely beat estimates. However, my belief is that the analysts will be focused on the polysilicon shortage issue. From reading the analyst reports of WFR and of some industry experts on the internet, I have found that the opinions are split with some believing the shortage will not last past 2008 while others contend that the shortage will last until 2010-2011. I looked at the charts of TSL, CSIQ, SOLF and JASO. TSL, CSIQ, and SOLF have now funneled themselves into a symetrical triangle. This tells me that the price of these equities could swing either way and quite violently during next week, either to the up or downside. JASO is the only one that broke to the upside on Friday and now I can see it going to 32 easily. However, all our other solar buddies are still in the triangles. Stockcharts.com states that 75% of the time these triangles are continuation patterns, while 25% of the time they are reversals with the target price being the height of the triangle. Next week, we will see which of the two groups of solar stocks will go higher. FSLR, WFR, ESLR, and DSTI are likely to go lower if the reporting companies state there isnt much of a supply issue and that margins are not effected. WFR, ESLR and DSTI do appear to be breaking down from a quick glimpse of their charts. FSLR seems bullish, but the price does seem to be parked up there and not going up. Next week, our two teams will diverge apart in the solar race. I cannot wait.