Additional Trading Ideas:
In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:
WSM, ADI, JWN, PCAR, FIS, CFR, MCY, CF, LM, IP, TYC, GPS,
JAH, SERV, MGM, MXIM, UDR
NEW BULLISH Plays
Canadian Solar Inc. - CSIQ - close: 28.96 change: +0.32
Stop Loss: 27.85
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on January -- at $---.--
Listed on January 02, 2016
Time Frame: 6 to 8 weeks
Option traders: exit PRIOR to February expiration
Average Daily Volume = 2.2 million
New Positions: Yes, see below
Solar stocks are back in vogue thanks to some major policies changes in the U.S. and the rest of the world. A couple of weeks ago 195 countries agreed to reduce greenhouse gas emissions when they signed the Cop21 agreement in Paris, France. A recent report by analysts at MIT suggested that the Cop21 deal could see solar energy demand triple in the next 15 years.
CSIQ is in the technology sector. They are considered part of the specialty semiconductor industry. According to the company, "Founded in 2001 in Canada, Canadian Solar is one of the world's largest and foremost solar power companies. As a leading manufacturer of solar photovoltaic modules and a provider of solar energy solutions, Canadian Solar has a geographically diversified pipeline of utility-scale power projects. In the past 14 years, Canadian Solar has successfully deployed over 12 GW of premium quality modules in over 70 countries around the world. Furthermore, Canadian Solar is one of the most bankable companies in the solar industry, having been publically listed on NASDAQ since 2006."
In addition to the Cop21 deal in Paris there was also significant news out of Washington in December. Both Congress and the Senate passed a budget deal that included a five-year extension for the solar tax credits. This really ignited the rally in solar stocks.
Fast forward to last week and Bloomberg reports that China is poised to boost their solar energy. Here's an excerpt from the Bloomberg article,
"China, the world's biggest clean energy investor, plans to increase wind and solar power capacity by more than 21 percent next year as it works to reduce greenhouse gas emissions by cutting its reliance on coal. The nation is targeting at least 20 gigawatts of new wind power installations and 15 gigawatts of additional photovoltaic capacity next year, the National Energy Administration said in a statement on Tuesday."
It would appear that the major solar energy companies should have at tailwind for their business as they head into 2016. CSIQ, with its widespread international business, should do well. The stock has developed a bullish trend of higher lows. The last few weeks have seen CSIQ break through multiple layers of resistance. The point & figure chart is bullish and forecasting at $40 target.
The last three days have seen traders buying the dips at CSIQ's rising 10-dma. Shares displayed relative strength on Thursday with a +1.1% gain. Tonight we are suggesting a trigger to launch bullish positions at $29.25 with a relatively tight stop loss at $27.85. More conservative investors may want to wait for CSIQ to close above potential round-number resistance at $30.00 as an alternative entry point instead.
Trigger @ $29.25
- Suggested Positions -
Buy CSIQ stock @ $29.25
- (or for more adventurous traders, try this option) -
Buy the FEB $30 CALL (CSIQ160219C30) current ask $1.85
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike