This crazy market sure has created some amazing opportunities, I think one of the best ones is JA Solar (JASO). This is a stock that I have been in and out of many times since their IPO a few years ago. When I first bought it I definitely underestimated the potential of the stock and sold way too early. That was summer of 2007 before the stock split when their growth really started to pick up speed. Well, here are ten reasons why I have to get back into the stock here for the long haul.
1. Its extremely cheap and profitable growth. Using lazy yahoo stats, the current PE is 15 and because their quarterly earnings growth is 321% (ttm), the forward PE is a mere 4. This growth is organic too, revenue grew 170% yoy last quarter.
2. It's a photovoltaic producer, and solar energy is the future.
3. It's China, and Jim Rogers is buying China.
4. Energy has fallen by more than 50%, it can't it go much lower.
5. Buying here is like buying the IPO, it went public just over $5.
6. JASO repeatedly found support at its 50 dma on the way up and resistance there on the way down. Currently JASO is a 100% gain from the 50 dma ($13) where I'd expect it to find resistance.
7. Positive divergence on the daily CCI.
8. It's oversold on the stochastics.
9. There are multiple unfilled gaps just above, any rally will find pockets of air up to $12-$13 (a double), which is where I'd target in the intermediate term.
10. The stock recently found support from post-IPO consolidation levels near $5.50. After breifly breaking to new 52 week lows (below this level) today, JASO sharply rebounded and now has the look of a failed breakdown. Failed moves lead to fast moves.
This situation has set up a very low risk to reward ratio. A stop can be set just below at around $5.2 and a good target would be $12. I would expect it to really take off once $7 breaks and so I've been buying March calls.