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On Tuesday, I mentioned that SPX 800 and Nasdaq 1500 would be tested. On Wednesday (yesterday), the market successfully tested those levels and bounced higher. This morning, the market showed optimism as the GDP report was not as bad as some had feared, and opened higher. Specifically, the solar stocks outshine other sectors today! Last night, House passed the budget, embracing Obama’s priorities on health care, energy and education. Republicans’ bid for gas and oil exploration was voted down. Further, the Chinese government launched a generous new subsidy for the clean power systems. The stage was set up perfectly for solar stocks to run!
We started looking at FSLR last Friday and bought March 130 calls:
March 23, 2009
07:35 | HappyTrading FSLR ($126.50) Bought to Open QHBDZ Apr 130 calls, at $8.90
We sold them on Monday because the market was just too volatile:
March 24, 2009
08:11 | HappyTrading FSLR ($129.90) Sold to Close QHBDZ Apr 130 calls, at $10.90 +22%
07:22 | HappyTrading FSLR ($132.20) Sold to Close QHBDZ Apr 130 calls, at $12.10 +36%
This morning, right out of the gate, most of the Chinese solar stocks jumped quickly over +20%. FSLR, on the other hand, took its time and lagged most of the solar stocks. I focused on it again and traded the same 130 calls and added 150 calls:
I got out of the 130 calls (+11.1%) too quickly as things were still volatile in the morning. The 130 calls went as high as $32.3 today and closed at $23.80!
As FSLR went beyond $145 with lots of momentum, I got back into FSLR with the 150 calls and captured a much bigger gain (+47.5%); bought at $12.2 and sold at $18, which also happened to be the day high!!
FSLR ended +12.25% higher at $150.39/share and went above $158 intraday. SPWRA also did really well adding almost +11% and traded almost to $30/share. Their Chinese counterparts did far better!! STP, TSL, YGE, LDK, JASO, SOLF all gained more than +40% today!!
PBW (clean energy ETF) led the sectors, jumping almost +11% today!
PBW closed above $8. Its nearest resistance is at $9. The solar stocks jumped quite far today, but, backed off quite a bit from their intraday highs. So, we may see some residual buying tomorrow.
On the contrary, OIH (oil services) was down 0.56% on a day when the Dow added 175 points! UNG (natural gas) dropped 8.56%! USO (oil), however, added +2.6% and the crude closed above $45/barrel. The recent rise in oil prices are baffling analysts. But, charts do show that USO may still have some more room to go higher (as I had discussed in my Market Forecast this weekend), with the $32.5 level as the nearest resistance. USO closed at $32.02.
The world is becoming more and more conscious of our environment and it looks like governments, globally, are finally making paradigm changes to solve our energy issues. There will be, of course, a transition period, and we are only at the beginning of it. Automakers are already making changes in their production pipeline. Energy companies may soon need to make shifts in their business models too! Many of these solar stocks have lost over 90% of their value since January 2008. I think these solars stocks may start to find their way back into investors profolios!
Good night and HappyTrading! ™
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