Can you explain the solar sector to me? Gained back 70% of my position in First Solar (FSLR) today. Nope I’m not out yet!
Okay. If you are like a stock wizard or professional and for some crazy reason your reading my posts that show me notoriously multiple times over I’m very wrong on stock directions then please comment on the stocks in the solar sector. All my charts showed First Solar (FSLR currently @ $189 + up to $191 after hours up +10%) being technically going up. All the charts had a smooth easy riding sloping uptrend which broke the daily downtrend.
The following day I got hammered losing around 40% of the capital in the trade or $400. Yes I could of sold out and kept $600 to stay alive for my next trade, but there was no reason for FLSR to go down. It was just negative market news bring down the stock. Furthermore FSLR dived all the way down to $165! What a Put play that would have been if I would have just changed positions since I saw realistically the day after I bought it the stock was showing a “dark cloud” a bearish signal showing downwards movement. So I saw my option price go down to losing 90% of its value. Just recently yesterday it broke the 55 minute downtrend and going up again today I’m back at 70% the value of my 1 contract or around $700. In after hours trading FSLR moved up another 1% or +2 pts to $191. I bought the contract at $196. Now that time is strongly against me and I haven’t sold out within 2-3 days of my planned trade I’m forced to see if FSLR will move over $200 as planned going into 4Q results as planned on Wednesday Feb. 13th. This CALL trade was based on movement going into results. Analysts (ZACKS) are currently predicting a surprise for First Solar results. In the position that it doesn’t given stellar surprising results this stock could be extremely punished or shoots up another 10%. I currently need the boost to sell out of my GTC at $20. I’m currently 13 points away in my options so technically the stock would have to move like 20 points or around to the price of $210 within 2 days. Yes, not realistic, I agree too. So if it does spike again tomorrow the day before the results I am going to sell out likely either breaking even or +10-20% ROI. If bad market news comes out and pushes FSLR down I might be forced to hold it through the results. I’d rather miss a move then kiss all my $1000 trade money good by.
Is it that ZACK’s predicts a surprise in FSLR which made it move +10% today? Did buyers just jump in with the stock pushed down a lot? I noticed HOKU at $10.21 also moved around +8% today. I can also agree solar stocks are super volatile right now, but what moved them for these past two days starting this week. It is driving me nuts. I think the next $1000 trade I do will be on a much less volatile stock like NUE, AAPL, EOG, SWN, RIG, BAC. These stocks do move with swings but not -40 pts down then +40pts up in about only 1 week like FSLR has. Good grief! One day when I can watch the market all day I will trade on such a big move and move with the direction in real time. I’m sure many traders are rich just trading such a move off FSLR. Also coming up is Nutri Systems (NTRI @ $24) earnings. The stock has been shorted heavily although with a peg of like .40 and still a lot of growth because diets are a fad. Diets have been going on for centuries! NTRI actually might surprise investors on results and this stock could zoom up in price. All of the damage has already hammered the stock down with bad news and bears eating at it. In a few days analyst could be wrong and institutions buy into the stock again. This stock was in the $70’s before it tanked. It is currently at $24 hitting a low of $20. One of my strategic plans is to buy CALL options on it and go through earnings with only $100 in the trade or 1 contract. Something very small of my $1000 so just in case the stock blows or doesn’t move I will not lose much.
This entry was posted on February 11, 2008 by Paul. It was filed under $1000 options trade, 2008 hoku trade, 2008 stock trends, First Solar, FSLR FEB 210 CALL, NTRI, nutri systems earnings, solar sector commentary and was tagged with $1000 option trade, blog, First Solar, FSLR FEB 210 CALL, FSLR technical stock chart, HOKU, NTRI, nutri systems earning, solar sector commentary, trading.
It was obvious to me when you bought that FSLR was likely to go down, which is why I told you to get out. The first thing you need to do is see which way the whole market is going ($NDX, $SPX). If you then think the stock is going the other way you’d better have a good reason for it. Don’t analyse a stock in isolation from everything else. Of course, the majority of E-Wave etc. people online do that, but that doesn’t make them right. If you read someone like Steenbarger they point out that the good traders look at relations between markets and securities.
February 12, 2008 at 2:00 am
It would have been nice if you posted this as soon as you saw my post! Even though my gutt told me it was going down. My gutt even told me it was going down after that +11% move yesterday up +16 pts! Of course I could have sold out at 7’s on my contract. Today down -14pts. I didn’t expect that much of a dip. Earnings are tomorrow. Since the stock fell into earnings my gutt is NOW telling me it will drop after earnings during the market open. I could be wrong, but usally a stock goes up if investors are faithful and know something and down if they know bad news is coming…. I guess I’ll find out tomorrow at the open. Today it did hit a high of $198 and my contract would have broke even hitting $10. My GTC was for $13. I guess that is God smacking me in the face for being greedy instead of closing it out at $10 for only a -$30 commission loss. Even if the stock does jump now it would need a gigantic move like +30 pts to redeem my auction before expiration friday!
February 13, 2008 at 1:21 am
If you want to read a reader’s feedback 🙂 , I rate this article for 4/5. Decent info, but I have to go to that damn msn to find the missed pieces. Thanks, anyway!
April 15, 2009 at 4:47 pm