Once again we see FSLR having had a great run, starting the year in the low $130's and having moved quickly up to over $170 on February 17th. But just as it has several times through 2010, First Solar is no rapidly heading back to that $120 to $134 base that it always seems to be a rough support area for the stock. What's interesting is that the $130 price level is also a rally point. A few times in 2010 First Solar fell to $107 or $112, but bounced back to $128 or $132 in a pretty quick fashion.
As of today, March 13th, FSLR is sitting at $140. The stock has lost about $30 per share since the February top. Looking at the intermediate history of this stock I don't believe we are done falling yet. Although there might be a bounce in the trading week, look for First Solar to continue "home" to that $130 or possibly $120 area. A price point of $122 to $125 would be a good opportunity to buy into a position for this company.
The catch is there is a bit of negativity all around the solar stocks right now. Looking at a list of solar stocks will show that most are down in the last month. Trina Solar is not doing that well, Evergreen Solar is in the tank trading at less than $2, and Energy Conversion Devices (ENER) just got hammered on Friday with a warning about losing a substantial amount of their future revenue due to slashes in European demand, specifically in Italy and France. So we have a number of fundamental negatives floating around in solar stocks right now. Subsidies being cut, austerity is arriving in Washington and in Europe with governments seeing solar investments as tertiary and basically not important. Production is still high with the major producers but if demand (and demand in this industry has meant governments around the world) do not keep up, then pricing of solar stocks may reset to a lower level across the board.
Despite this threat, FSLR is still a well run and profitable company. First Solar is the best solar panel and service company in the United States, it really has no peer. So look for a price movement lower (which is likely) and be prepared to "leg in" in the $120's. But it wouldn't be a bad idea to standby for another purchase at the $105 - $109 area as well, and you may want to dollar cost average a third time if the stock deeps below $100. But for the long-term position trader (more than six months, even better more than a year) then this should be yet again another valuable investment point for FSLR. The reality is that First Solar keeps providing solid earnings, and even if the solar stocks in general really start to crumble, then FSLR will ultimately be the rallying point for solar in the U.S.
The stock is doing well on Monday, 3/14, but I do not look for this to last. The market, and solar stocks in general, will lose more ground over the next few weeks.
Look to invest in FSLR in the coming week(s) in the $130's if you are aggressive, in the $120's if you are a fan of FSLR like I am, and if you are cheap (or pessimistic, or afraid) maybe look at the $110's with some more money on the side for a second or third level buy in point. The important thing is that there are really good odds that if FSLR sees the $115 to $123 price range again, then it will see the $138 to $145 price range again within a year of the lower point. It's all on the charts, and the funamentals are with this company to back-up the technicals.
