Damn, just when I thought they were dead - all of them are making a comeback to new highs. I knew I should have got back into JASO at $21. Anyone know what's making them run today?
I have a hunch these alt energy plays are an emerging hot sector, kind of like homebuilders, exchanges, soft drinks, chemicals, etc.. http://news.com.com/8301-10784_3-9732232-7.html?part=rss&subj=news&tag=2547-1_3-0-20 http://www.marketwatch.com/News/Sto...E8A-25BE-40D3-B4DD-274401B3F529}&siteid=nwhpf The problem is, all of these companies have warts, big hairy ones at that!
Remember my post on CSUN and the other solars? Here is my reasoning: 1) The price of crude is somehow correlated with alternative energy plays. A higher price of crude means the solar plays become more attractive. I believe a floor of $68 per barrel has been established for crude. We may see crude in the 70s in the times to come. 2) While the market has gone up, solar has traded sideways to down. These solar plays have now become good value stocks. Despite all the negative hype, the majority of them have great balance sheets and generate a genorous amount of revenue. 3) Cramer/Greenberg/Barrons/Financial Press Gloom-Doom effect wearing off- Think about it. These guys were talking the price down the entire time getting the loose hands to sell. Indeed, many of the plays sold down generously. However, it was all talk that brought them down and not based on the actual fundamentals. "Talk" usually has a temporary effect on the price and fundamentals shine through in the end. 4) Ethanol effect- Many people were making parallels with Ethanol and Solar from the start stating that since ethanol stocks sold off last year so will solar. Obviously the two have nothing to do with each other besides that they are both alternative energy plays. The fundamentals are shining through now and the ethanol effect is now wearing away. 5) Iraq factor- Iraq now heating up again with reports of casualties. Everyday alternative energy looks better and better as more reports of casualties flood in. Its only a matter of time that the US will leave Iraq and someone else will be in charge of the oil in that region. I believe reason #2 is the greatest contributor. Each year certain stocks sell off while others run. Now its time for solar to run while the rest sell off. The greatest example of this was in the year 2000 where tech stocks were dumping yet the large cap value stocks, like insurance stocks, had great runs. Here are my opinions from a quick 10 second view of each chart: - CSUN- If it closes over 13.60, then it will go to 15.77. A close over 16.25 means it will go to 21. - SOLF- Dont touch it. - FSLR- Certain it will go to 90, maybe will see 100. - JASO- I wanted this to pullback more, say to 26, but I dont think it will give us the chance. I say it will reach 38-40 in the future. - ESLR- Dont touch it. - CSIQ- I liked the price action last few weeks, I wouldnt touch it though. Im a little nervous how it ended up today. - STP- I think this has pulled back enough and ready to move forward back to 40. - SPWR- This had a good run today, I would buy on pullbacks from here. I think it will pullback on Monday because of the monster run today. - LDK- Little nervous because its simply too new, but I like the fact that its listed on the NYSE (stricter listing requirements). The chart doesnt look bad and its holding up well. In short, the solars that had nice runs today I would long. The others that did not run I would avoid. If you want to long a solar, pick 3 different solars because some of them dont run together and you need a hedge.