Wednesday, November 21, 2012

Happy Thanksgiving

Thanksgiving at the kid's table
It was a tradition in the mid west where I was born.  The "senior kid" got the big person chair and was considered to be next in line to move up to the big people's table.  It was a right of passage.


  


Wednesday Afternoon

V Daily Chart (10:45AM)
The channel is clear and it has been right to sell at the top and short (or buy puts) with the first red candle.  That looks like it could be today.  As we get near the close you may want to check it out.  I know I will.  (That is if someone will remind me ...)

Wednesday Morning

Gator's Chart of the Day: FSLR
Solar stocks have never been one of my favorite groups but since the green candidate won I'm looking to see if there is a trade I can embrace.  I looked at about 25 solar related companies.  If the screen requires positive earnings and share price above $3 the pickings are very thin.  The best candidate I found is First Solar Inc.

FSLR trades with a forward P/E of 5.8, a PEG of .21 and the short interest was 56% at the end of October.  The short ratio (# of trading days to cover assuming average volume) is 5.8.  (Sources are Finviz and shortinterest.com.)

Looking at the chart, it is in an uptrend and the 50 day simple moving average has been a good entry.  The 200 day sma has quietly slipped beneath the price and in the next few trading days the stock should be in the bullish configuration of 20 day above 50 day above 200 day.  The Bollinger bands are also getting tight so I expect a significant move and the bias is to the upside.

The Trade

I really don't want to get big in a new position this week.  The market is closed 3 of the next 5 days and volume will be pitiful when it's open.  Having said that I may take a 1/4 position if the stock stays above the 50 day and I can get it under 24.35.  I would prefer to begin next week.

Once the initial position is established the stop would be about .25 under the 50 day.  I would look to add on a move above the 20 day and if the stock clears 25.50 I would want to have my full position in place and my stops raised to insure no loss.