Solar Stocks Review - Monday 2-21-2011
Solar Stocks and Market Commentary with J Peter Lynch
Point Roberts, South Salem, New York - February 21, 2011 – www.Investorideas.com, a leader in cleantech stock research, issues a new solar stocks review from contributor, J. Peter Lynch for February 21st.
Solar Stocks Commentary with J Peter Lynch -
Read other articles, Exclusively for InvestorIdeas.com and Renewableenergystocks.com: http://www.renewableenergystocks.com/PL/
See Peter's technical solar stocks review: http://www.investorideas.com/PL/Solar-Stocks-Review.asp
Solar Stocks Review - Monday 2-21-2011
J Peter Lynch
An overall summary and table are below which gives a current snap shot of the "technical picture" of each of our solar stocks. This is updated weekly and also whenever there are any significant changes.
Note: At this time there is a general market comment - advising caution at this time.
The majority of our stocks (14 of 22) have seen their monthly momentum turn positive in the last week or two and 17 of 22 are showing positive weekly momentum – all short term signs that the solar sector seems to be getting stronger. At this time the strongest stocks are: JKS, LDK, SOL, SOLR, TSL and First Solar (FSLR). Two of our "solar seven" (JASO and SOLF) have had their rating reduced from Strong "S" to Neutral "N" last week.
Critical levels for the weakest of our "solar seven"
JASO - starting to show some strength. The stock closed above $8.25 showing that it has regained its upside strength. Another week or so of this kind of positive action will move the stock back to an S rating.
SOLF – New symbol – HSOL is at a critical long term support level. A close below $8.00 it would trigger a sell signal.
Other Stock Comments
EMKR – has been showing recent strength, but is very overbought at this time and I think we will see the stock correct back to a more reasonable level.
SPWRA – starting to show some real strength for the first time in quite a while and has moved up to a "S" strong rating from N.
YGE – has been showing strength and has moved to an N rating up from W.
Market Comment - Caution Advised
Currently the market has two potentially serious "red flags" warning investors to be cautious:
- Investor Sentiment
Investor sentiment is considered to be a contrary indicator and when too many investors or investment newsletters are Bullish – it is a time to be cautious.
At the current time BOTH the American Association of Individual Investors (AAII) poll of its members and the Investors Intelligence poll of investment newsletters are above their danger zones of 50%.
There is no guarantee of anything in the stock market, as we all know. But levels of sentiment so extremely bullish would historically indicate at least the potential for a market correction of 10% to 15%.
- Stocks are very overextended
On the technical side the market is very overbought above its 200 day moving average. In fact, the current overbought condition is more extreme than any important market top in the last 10 years – certainly another significant reason to be very cautious at this juncture in the market.
Keep in mind that stocks can stay overextended for long periods of time. As a result I am advising caution at this time – since the number one rule of investing is: Not to lose money and this is not the time to initiate positions unless you are a shorter term trader and watch the market very closely.
Solar Stock Review as of the close on Friday 18 February 2011
|Symbol||Recent Price||50 Day MA||Trend||Weekly|
|# Weeks||RS Sig||Rating|
50 Day Moving Average (MA) - this is a short term measure of a stock's current technical picture. If the current price is above the 50 day MA it is a positive indication and if it is below the 50 Day MA it is a negative indication.
Overall Trend - this is the overall longer term trend of the stock (Positive + or Negative -). When solar stocks were badly underperforming the market almost all our solar stocks were in negative trends - the stocks that turn to a positive trend first are usually the strongest stocks relative to the group as a whole.
Weekly Momentum (Mom.) and Number of weeks positive or negative - this is a measure of the short term momentum of a stock. It is derived by comparing the one week moving average (MA) of the stock to the five week moving average. When the one week MA goes ABOVE the 5 week MA the weekly momentum turns positive, when it goes BELOW the 5 week MA the weekly momentum turns negative. Momentum, on average, stays positive or negative for between 6 and 8 weeks. So a stock that has been negative for 1 or 2 weeks will usually have at least a few more weeks of negative action to come. This would be useful, for example, if someone wanted to buy a particular stock and its momentum just shifted to negative, they will likely be able to buy the stock lower if they are patient and wait for a pullback in the price of the stock.
Relative Strength - this is a measure of the strength of an individual stock relative to a widely followed index - in this case the Standard and Poor's 500 (S&P 500). If the relative strength is “buy” this means that the individual stock is stronger relative to the index and vice versa.
Rating - this a my technical rating on each of the solar stocks after reviewing the technical indicators (momentum and trend) plus a number of additional indicators (monthly momentum, strength relative to the S&P 500 stock index, overbought/oversold status etc.) to arrive at a comparative rating as to how each stock stands technically. N = neutral, W = weak and S = strong. An asterisk on the rating indicates a change of rating for that stock.
Mr. Lynch has worked, for 34 years as a Wall Street security analyst, an independent security analyst an investment banker and private investor in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977 and is regarded as an expert in this field. He was the contributing editor for 17 years to the Photovoltaic Insider Report, the leading publication in PV that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. He is currently a private investor and advisor to a number of companies. He can be reached via e-mail at: SOLARJPL@aol.com. Please visit his website for the promotion of solar energy - www.sunseries.net
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Disclaimer: The views and opinions expressed in the research published are those of the individual companies and writers and not necessarily those of Investorideas.com® or any of the industry sector portals. At the time of publication, writers may hold positions in the stocks or companies mentioned.
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