January 04, 2013 at 15:51 PM EST
ChartWatch: Solar Powers Ahead
First Solar (NASDAQ: FSLR) still hasn’t been given the praise it deserves. Despite a meteoric rally to end the year, analysts remain bearish. The majority of them rate FSLR a hold. Meanwhile, the average price target is $23, 35% below the current market price. How are the shares a hold at $35? Analysts are clearly in denial. Though the Street missed the boat, ChartWatch readers didn’t. ChartWatch has been a proponent of FSLR since October. In fact, I pointed out the pennant (blue lines) as a bullish development , going so far as to say, “the stock may increase by 50% before year’s end.” This chart shows the price of FSLR shares along with an important resistance level to monitor. I confirmed this view in a more recent December article . At the time, the stock was around $27 and I still expected $34 (blue dot). Only one day into the new year and FSLR has ripped through my price target. So do I think it has more room left to climb? Absolutely. The $40 area represents heavy resistance and will be a tough price to breach. However, the shares appear ready to at least challenge this zone. Realistically, $32.50 should support the stock in the near term. And based on the high volume accumulation activity, bullish traders should bid FSLR up to $37-$38. However, this stock is volatile and eventually a larger pullback should ensue, giving long-term investors a chance to buy at a lower price. I’d view any pullback as a buying opportunity, with an entry price near $30 as optimal. Solar stocks will continue to surprise investors this year and FSLR is the safest stock within that industry. Equities mentioned in this article: FSLR, TAN Positions held in companies mentioned above: none Don’t Miss: ChartWatch: Coal Miners Can’t Heat Up
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