Saturday, July 28, 2012

Saturday Rock Blog: Healthy Body

I'll be the first to admit that I've been very wrong on solar stocks this year. When the bottoms fell out on FSLR, SPWR and others they got into a "death spiral" and kept going insanely lower. Now that they are priced for bankruptcy you could probably make some good valuation arguments to go long these stocks. I won't do that though. I just wanted to note how great FSLR's chart is shaping up after it spent the past month consolidating the 40% rally from the all time low at $11.50. I especially like how FSLR closed Friday above its now rising 50 dma near the high of the day. Closing near the high seems like a simple feat to accomplish but shorts and nervous longs have prevented this from happening for months. On days when there is a big rally in FSLR you always see a 2-3%+ tail on the daily candle. We could imagine this whole move as a healthy retracement of the long term downtrend and call it a ABC correction or we could call this a long term bottom. Regardless, using a measured rule approach, you get targets around $20-22 should FSLR break out above $15.50-$16. I see this as a very likely possibility but I don't plan to exit my position at $20 should it get there, I might sell some covered calls though. Of course this all depends on Earnings which FSLR reports Wednesday after the close. QE3 from Bernanke won't hurt either. Disclosure: FSLR is my largest long position by far so I might put on some sort of hedge before Wednesday. I am also long SPWR.

Tuesday, July 24, 2012

Monday Rock Blog: Lovin' Touchin' Squeezin' Breakin' (DOWN)

Is it just me or dows the market look like it is about to completely melt down? Watch IWM collapse if it can't hold $77.50. Disclosure: I own IWM calls, but will exit them tomorrow

Saturday, July 14, 2012

Saturday, July 07, 2012

Sunday, July 01, 2012

Sunday Rock Blog: Karma Police

The increasingly bearish developments in the Russell 2000 (IWM) were negated by the huge rally we saw Friday taking the small cap index above their 50 dma and the neckline we've all been watching at ~$78.  Even though this was the last day of the first half of 2012, and fund managers certainly had a vested interest in this kind of rally, it does appear to be genuine (like it will stick).  Volume was healthy and bullishness was wild eyed across the board after every major US stock index appeared to hold their (rising) 200 dma.  Its hard to ignore the bullish look of many daily charts including IWM above, but the weekly's still show a long term double top to me.  I'd be surprised to see IWM trade below $78 in the near future, but if it did, I'd get bearish in a hurry.  For now though, the bulls are in control.

Disclosure:  I still have a few IWM puts to get rid of, unfortunately.