EC Some Bullish Solar Stock Setups

November 16, 2015 was a strange trading day as U.S. stock markets rallied in the wake of the horrific terrorist attacks in Paris. There were really big moves in even some big cap stocks. The S&P 500 (SPY) reversed all of its losses on Friday and then some.

The S&P 500 bounces back in impressive fashion.

This is the strong and supportive context in which I am noting some particularly interesting setups for solar stocks: First Solar (FSLR), SunPower Corporation (SPWR), Canadian Solar (CSIQ), and Hanwha Q CELLS Co. (HQCL).

FSLR looks like it has successfully retested support at its 200-day moving average (DMA). Conveniently, this test also happens to coincide with a near complete reversal of a post-earnings gap up. FSLR is my favorite setup given its 200DMA is starting to trend upward.

First Solar bounces off support

SunPower gained 2.6% on the day but closed just below its 50DMA. Given this trendline has started to turn upward, I will get bullish on SPWR if it manages to close above the 50DMA. A break below yesterday’s intraday low will be very bearish and suggest that resistance at the 50DMA is confirmed. Moreover, such a break will confirm the invalidation of the bullish post-earnings gap up from last month. Finally, the confirmed resistance at the 200DMA is a note of caution on a rally.

SunPower sold off sharply after failing to break down resistance at its 200DMA

Like its solar cousins, Canadian Solar completely reversed gains from its last earnings report. Unlike its cousins, CSIQ held its gains for only a brief period after the post-earnings open. The subsequent selling has been more shallow, perhaps because buyers had not over-committed from post-earnings giddiness. I like yesterday’s bounce off the lows because it seems to validate the 50DMA as support. I like CSIQ for a potential extended rally after it first closes higher.