First Solar, Inc. (FSLR) — Solar stocks have taken investors on a wild ride in 2015. Every time it looked as though they would fall into the abyss, sharp snapback rallies pushed them back toward the upper end of their larger trading ranges. First Solar remains one of the standout names in the industry, and its stock enjoys cult status despite the fact that it has been trendless since March 2014.
While Guggenheim Solar ETF (TAN) is down 3.5% year to date, First Solar, its largest holding, has soared more than 47%, making it a clear outperformer. In recent days, shares have been toying with technical resistance, and the next burst of upside momentum could give them the nudge they need to break out.
FSLR stock broke below multiyear support in October 2014 and has yet to reclaim it. The price action since March 2014 can be classified as a consolidation and, ultimately, a break higher should be in the cards. But rather than calling for a new major, multiyear run up, for the time being, I am focused on a move back toward the March 2014 highs and another potential retest of the broken support line.
On the daily chart below, we see FSLR stock made an important higher low in early December as it bounced off the 50-day moving average, which led to a multiday buying spree. On Dec. 16, FSLR stock gapped higher into horizontal resistance from the April highs in the mid-$60s. The past few days of consolidation have held above this up gap. If shares can overcome the $66 area, a run to the mid-$70s may be under way.
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As of this writing, Serge did not hold a position in any of the aforementioned securities.
