Solar Stocks Review - Monday 3-21-2011
Solar Stocks and Market Commentary with J Peter Lynch
Point Roberts, South Salem, New York – March 22, 2011 www.Investorideas.com, a leader in cleantech stock research, releases a new solar stocks review from contributor, J. Peter Lynch for March 21st.
Solar Stocks Commentary with J Peter Lynch -
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See Peter's technical solar stocks review: http://www.investorideas.com/PL/Solar-Stocks-Review.asp
Solar Stocks Review - Monday 3-21-2011
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 - continue to advise caution at this time.
As I cautioned in early February 2011, the market is VERY over extended and the probability of, at least, a correction in the range of 10% to 15% was far greater than any upside gains. At that point it was advised that no new positions should be taken.
Individual Stock Comments and Actions taken to Solar Seven
A large number of our stocks moved DOWN in my rating system and many more stocks are now rate Weak "W". All 22 of the stocks now have negative weekly momentum and are trading below their 50 day moving averages - both negatives for the short term. In addition, the solar group as a whole is underperforming the market in general and is by definition a lagging group NOT a leading group. Money is usually made buying leaders not laggards.
As a result of the higher level of risk at this point in time a number of changes were made to the solar seven stocks which I considered the strongest of the solar segment and which gained 43% in 2010 vs the market gaining 13%. Our initial positions were 1,000 shares of each stock.
The following actions were taken as a result of market weakness and input from various technical indicators:
- The entire position in HSOL was sold - 500 shares at $9.00 and 500 shares at $8.00
- One half of the position in JKS (500 shares) was sold at $25.00
- One half of the position in LDK (500 shares) was sold at $12.00
- One half the position in SOL (500 shares) was sold at $12.00
We are holding the remaining positions as long as our indicators stay positive on the remaining 6 positions:
Performance year to date 2011
Year to date our portfolio, including all sales is up - 14%
This compares very favorably to the:
Dow being up 2.4%, S&P 500 being up 1.7% and Nasdaq being down -.35%
Market Comment - Caution Advised
Currently the market is flashing serious "red flags" warning investors to be cautious at this time, the most serious being a reduced, but still significant overextension of the S&P 500 over its 200 day moving average:
In fact, the current overbought - certainly a significant reason to be very cautious at this juncture in the market. Very few good things have ever happen from these levels historically.
The number one rule of investing is: Not to lose money. The best way to accomplish this is to adhere to a system that you have confidence in and let it guide you so as to let your profits run and to cut your losses quickly. This time of increase market volatility is certainly 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 Friday 25 March 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.
Keep in mind that there are two basic types of equity (stock) analysis. Below is a brief description of each and its primary purpose:
Fundamental Analysis - this is the analysis of the fundamental financial condition of the company and will identify which stocks are stocks you may want to buy when the timing is right. This form of analysis will give you NO indication of the best time to buy the stock.
Technical Analysis - this form of analysis will tell you "when" to buy a stock. It will do this by showing you (in chart format) the basic interaction of supply and demand and when the two change and shift which will indicate a time to buy or a time to sell.
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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