Trading a Volatile Market
Solar Stocks Commentary from J. Peter Lynch
Point Roberts, South Salem, New York - June 8, 2010 (Investorideas.com renewable energy/green newswire) - Investorideas.com and its green investor portal, renewableenergystocks.com, update investors with recent market commentary from contributor, J. Peter Lynch.
Solar Stocks Commentary with J Peter Lynch -
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Trading a Volatile Market
The market is still holding in its major uptrend, but is perilously close to breaking some significant technical support levels – specifically 1040 on the S&P Index (SPX), 9750 on the Dow Jones and 2140 on the NASDAQ. Breaking these levels would put the market BELOW the February lows and possibly point to lower prices.
In my last article I mentioned that caution was warranted and that weaker stocks in your portfolio should be sold. In addition, I also cautioned that you should prepare to move to a more defense position or total cash (if you are a conservative investor).
If the market breaks the support levels mentioned above I would certainly move to a fully defensive position.
Solar stocks have continued to decline with all 21 of the stocks we follow now below their 50 day moving averages. The vast majority of the 21 stocks are in major downtrends and the remaining stocks are very close to breaking down. As I have said last week:
"Given these odds this certainly is NOT a time to be buying solar stocks, unless you are a pure trader who can move in and out of stocks daily. It is not a good idea, in a declining market, to establish new positions especially in one of the weakest market sectors".
There are times to be invested and there are times to simply be patient and sit in cash on the sidelines – this is, in my opinion, one of those times to be sitting in cash.
I will be watching the markets very closely and will let you know if I see a significant change starting to unfold. The markets could suddenly turn around and head up, surprising everyone, but until they give us much more decisive positive signals I would sit and watch.
Mr. Lynch has worked, for 33 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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