NEW BULLISH Plays
Trina Solar Ltd. - TSL - close: 14.51 change: +0.50
Stop Loss: 17.40
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on September -- at $---.--
Listed on September 13, 2014
Time Frame: 8 to 12 weeks
Average Daily Volume = 5.4 million
New Positions: Yes, see below
Why We Like It:
Solar energy use is growing. As more and more countries look to build up their renewable energy the solar space should benefit. TSL is one of the biggest Chinese solar energy companies and one of the most profitable ones. They currently have almost 1,000 patents for solar technology.
According to the company website, "Trina Solar Limited is a global leader in photovoltaic modules, solutions and services. Founded in 1997 as a PV system integrator, Trina Solar today drives smart energy together with installers, distributors, utilities and developers worldwide. The Company's industry-shaping position is based on innovation excellence, superior product quality, vertically integrated capabilities and environmental stewardship."
Back in July the U.S. government initiated tariffs on some overseas solar energy companies for dumping solar energy equipment in the U.S. market. Some firms have lowered their guidance due to these new tariffs. Thus far TSL is not.
TSL is the second biggest solar panel maker in China and they're poised to become number one at their current pace.
If you believe management the solar energy business is booming. In a recent interview with Bloomberg Trina Solar's CEO Gao Jifan shed some light on the industry. Late this past week Jifan said, "Right now Trina is producing at 100 percent capacity and selling at all rates, yet we still canâ€™t meet all customer demand."
TSL's solar-panel capacity will rise to 3.8 gigawatts this year. That's up from 3.4 gigawatts last year (at the end of June). They expect China's total solar instatllations to soar to 50 gigawatts by 2015 and to 150 gigawatts by 2020.
Technically the stock is performing well. The gap down on August 26th was a reaction to earnings but TSL has quickly recovered. Shares have broken out past its 200-dma and now it's poised to hit new five-month highs. The point & figure chart is bullish and forecasting at $20 target.
If this rally continues it could spark some short covering. The most recent data listed short interest at 30% of the relatively small 68.39 million share float.
We are suggesting a trigger to open bullish positions at $14.80. More conservative investors may want to wait for a rally past $15.00 instead.
Trigger @ $14.80
- Suggested Positions -
Buy TSL stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the 2015 Jan $15 call (TSL150117C15) current ask $1.68
Option Format: symbol-year-month-day-call-strike