NEW BULLISH Plays
First Solar - FSLR - close: 40.34 change: +1.59
Stop Loss: 38.75
Current Gain/Loss: unopened
Entry on April -- at $--.--
Listed on April 23, 2013
Time Frame: exit PRIOR to earnings in early May
Average Daily Volume = 8.1 million
New Positions: Yes, see below
Why We Like It:
It's been a good month for FSLR bulls. Most of the stock's gains came on April 9th following the company's analyst day. FSLR raised their 2013 earnings guidance to $4.00-4.50 a share, which was significantly higher than Wall Street's estimates of $3.60 a share. FSLR also raised their revenue guidance into the $3.8-4.0 billion, again well above analysts' estimates.
FSLR had a high amount of short interest and naturally the stock saw a short squeeze as everyone tried to cover their bearish positions at once. The most recent data listed short interest at 32% of the 60 million-share float. That may not be accurate since many of them may have closed their positions. I suspect that FSLR still has a high amount of short interest. Now after a two-week consolidation sideways under resistance near $40.00, a new breakout higher could spark more short covering.
The April 9th high was $41.00. I am suggesting small bullish positions if FSLR can trade at $41.05. More aggressive traders may want to jump in early now at current levels. Our target is $48.00 but we will plan on closing positions prior to the earnings report in early May.
Remember, small positions. FSLR can be a volatile stock. We want to limit our risk.
Trigger @ 41.05 *Small Positions*
Suggested Position: buy FSLR stock @ (trigger)
- (or for more adventurous traders, try this option) -
buy the May $45 call (FSLR1318E45) current ask $1.34