Saturday, November 26, 2011

Saturday Rock Blog: Davyd

So much for posting everyday this week... I had less than time I thought, anyways here's another Pogo "mashup." Its produced from the film AI, which was oriringally a Stanley Kubric concept but got directed and produced by Steven Spielberg later. Its not perfect but a must see for sci fi fans (AI). Hope you all had a Happy Thanksgiving! After the worst Thanksgiving week since the 1930's, is it time for a ride in Santa's sleigh?

Sunday, November 20, 2011

CVX at the top of its range, bearish signals

Disclosure: I have no position in CVX but might take a shot with puts if it holds below $100 this week.

Saturday, November 19, 2011

Saturday Rock Blog: Mellow Brick Road

I just noticed Pogo has a bunch of new videos I haven't seen. This week I'll keep it mellow for the holiday and post a chart a day with a Pogo video. Happy Thanksgiving!

Thursday, November 17, 2011

FSLR descending triangle coming to apex, big move expected

(click chart for higher resolution)

One great fundamental bull case for First Solar is outlined in this report by morningstar, just to quote a few lines:

"We expect an industry rebound will not occur until mid-2012 at the earliest. Solar demand growth remains promising in the long term, but near-term growth rates are going to be very modest...

First Solar is the only solar company whose shares have a clear near-term catalyst: its pipeline of utility-scale projects in North America. We project this business segment to constitute more than 70% of the firm's revenue and 35%-40% of production output in 2012, while also serving as the overwhelming source of near-term earnings beginning in the third quarter of 2011.

Pricing on First Solar's 2011-13 backlog of utility-scale projects was set before the industry downturn, and none are subject to renegotiation. These projects were priced using First Solar's 2008-09 project installation cost levels, which were 35%-40% higher than they are today. Also adding to the bottom line will be the reduction in costs of capital for the 1,070 megawatts' worth of projects that received Department of Energy loan guarantees, which allow the company to realize higher selling prices. Putting it all together, this book of business isn't just going to provide an earnings buffer, but will in fact mint the company a great deal of money...

The big risk to First Solar's longer-term story is what will happen to the company's profitability and returns when these lucrative projects are completed in 2013. Any new utility-scale deals will be signed at lower prices. Without another large reduction in costs, the company could encounter some major headwinds. But we don't think this risk will be influencing the stock for quite a while, as 2014 is a lifetime away in the solar sector."

To the best of my knowledge, First Solar presents the greatest long term (5-10 yrs) investment opportunity in the market today. Despite this, an obviously bearish descending triangle has formed in the daily chart appearing as a continuation to the long term downtrend. Unfortunately, with the broader market in bear mode, solar will continue to struggle despite soaring energy prices.

Is FSLR trying to fill the 2007 gap to $35?

Disclosure: I am long FSLR stock and calls. I expect to continue buying FSLR for years to come.

Saturday, November 05, 2011