I definitely have an eye on FireEye (FEYE) and I know I'm not alone. After an early January push, FEYE retraced nicely without breaking a support trend line to refresh for another breakout attempt. Right now, we are set up to try it today and likely again tomorrow, if today fails. The Relative Strength Index (RSI) is strong, although we do have a series of lower highs, so a push over 66 is absolutely needed. On the plus side, there are higher lows as well with the RSI, so there is simply a wedge pattern rather than a bearish divergence. This makes sense in the context of a consolidation and push setup on FireEye.
Some other longer-trend setups, such as slow stochastics and the parabolic stop and reverse (PSAR), favor a buy here. My approach, which is a bit of a theme today, is to take a half a position now and the other half on a close over $36.20. This one has a fairly tight stop at $33.85 on a closing basis. With a 12% short interest and a very coiled chart, this has the potential to be a very big mover over $36.20
I'm starting to see some good setups in solar and believe this could be a good week for names such as SunEdison (SUNE), First Solar (FSLR), SolarCity (SCTY) and SunPower (SPWR). I'd prefer to use a mix of these four rather than any solar ETFs if I were looking for a mix. If I were to only pick one right now, I'm leaning towards SUNE.
On the surface, SUNE looks only "so-so" on the daily chart. In fact, the price is in a wide wedge, with $20.60 as resistance and $18 as support, so being up around $20 doesn't look great from a risk reward perspective. However, the secondary indicators seem to be saying the price is ready to test that resistance and possibly break through. The RSI is pushing over 50 and the Vortex Indicator is making a strong bullish thrust. Lastly, we have a bullish crossover in the moving average convergence divergence (MACD), so I think we may have a setup here worth a half position now and another half on a push over $20.60. That's going to be my approach. Any close below $18 will stop me out of this position.
There's still enough uneasiness and volatility out there to have me dialing back on size and being very specific about entries. Currency action is not something I follow closely, so I feel a little bit more vulnerable to being blind-sided by it or flat out misinterpreting its impact on equities. As such, I'll take a slightly more conservative approach and really let price action dictate my adjustments and sizing over the next few weeks.