• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Energy

Solar Continues to Sizzle

It's where the hot money is flowing.
By JAMES "REV SHARK" DEPORRE
May 24, 2013 | 10:26 AM EDT
Stocks quotes in this article: SCTY, FSLR, JASO, YGE, JKS, CSIQ, SPWR, TSL, WFR, RSOL

Thursday's bounce following the gap-down open used up quite a bit of buying "juice" and the bulls are having a much more difficult time this morning. The fact that many plan to head out early for the long weekend is keeping some money parked on the sidelines. On the other hand, dip buying has worked so well for so long that support can kick in at any time.

Breadth is quite poor in the early going at better than 3:1 negative with biotechnology, oil and homebuilders under pressure. The hottest group in the market remains solar energy. That is where the hot money is flowing. Key names in the group to trade are SolarCity (SCTY), First Solar (FSLR), JA Solar (JASO), Yingli Green Energy (YGE), JinkSolar (JKS), Canadian Solar (CSIQ), SunPower (SPWR), Trina Solar (TSL), MEMC (WFR) and Real Goods Solar (RSOL).

I expect the solar theme to continue for a while and I'll be watching closely for trading opportunities. These theme plays often last much longer than I think they will. Solar energy has always been a good group for traders, which means they are likely to stay active and offer good opportunities on pullbacks.

My wife is having surgery today for a broken leg, so I'm heading out. Do something fun this weekend. I'll see you on Tuesday.


Manage Your Positions

  • Raising cash to be more opportunistic is not a bad idea.

One thorn of experience is worth a whole wilderness of warning. -- James Russell Lowell

The bulls did an excellent job Thursday of bouncing the market back up after a poor start, but there is renewed pressure this morning due to a mediocre bounce try in Tokyo on continued worries about economic slowing in China.

Yesterday, U.S. markets continued the pattern of immediately forgetting any recent negatives. The market was spooked by comments that the Fed may taper off its bond buying and also by the poor action overseas. It looked like we finally were going to put a decent dent in the trend that has been running all year, but the buyers showed up at the opening bell and by the end of the day we just had minor losses.

Given how often we have immediately come back from pullbacks, it isn't too surprising that we bounced like that. It is almost reflexive to buy early weakness. Buyers have no real fear that this market is going to fall apart. They know they Fed is not going to stop quantitative easing any time soon, so when we do sell off, they jump in because they know sooner or later one of the Fed members will make dovish statements again.

The wild volatility in Japan, where the Nikkei swung up and down around 3%, is causing some nervousness this morning. Japan has seen massive action by its central bankers and it lit a fire under its market. Now there are concerns that the aggressive easing is the simple solution and it is causing violent reactions.

In the U.S., the bulls really aren't worried very much, so far. They don't like these comments about the Fed reducing its bond buying in the near future, but there is no real concern that the Fed is about to abandon its low-interest-rate policies.

Many market players would even say that the selloff on the Fed comments is bullish. We needed an excuse for some profit taking and now we have it.  We were clearly technically extended and things were becoming a bit frothy. A pullback here gives us a little skepticism and negativity, which are important ingredients for more upside.

While some weak action isn't a bad thing in the bigger scheme of things, there was still some ugly action under the surface that required that we take some defensive steps. Many of the recent leaders stumbled and the losses can mount fast if you don't manage your positions.

Raising cash so you can be more opportunistic as things develop is not a bad idea. Too often market players will remain frozen when the market becomes volatile out of fear that they will sell at exactly the wrong time. More often than not, even if a sale is poorly timed, another good opportunity will come along. If you err on the side of selling, it is not a hard problem to fix  If you simply sit and do nothing, it is much more difficult to repair the damage of lost capital.

The mood of the market has changed a bit, but we haven't yet really had a major breakdown. It looks like we are undergoing a topping process now, and that means increased caution. But the resilience of the market is something we need to respect.

Keep in mind that a Friday in front of a long weekend often has a positive bias, but the second gap down in a row is not going to be quite as easy to buy as the first one.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark was long WFR and SPWR, although positions may change at any time.

TAGS: Investing | U.S. Equity | Energy | Stocks

More from Energy

3 Oil & Gas Royalty Trusts For $100 Oil

Bob Ciura
May 20, 2022 2:05 PM EDT

For investors looking to take advantage of lofty oil and gas prices, we like these investment vehicles.

Exxon Mobil Nears an Historic Upside Breakout on the Charts

Bruce Kamich
May 20, 2022 9:56 AM EDT

Here's my advice for traders.

Constellation Energy Could Power 20% Higher From Here

Bruce Kamich
May 20, 2022 7:34 AM EDT

Shares of the clean energy power generator have rallied since going public in January.

Oil, War and Inflation: Here's Where Prices Are Likely Headed

Carley Garner
May 18, 2022 1:00 PM EDT

Oil has a war and inflation hedge premium, but those aren't permanent.

Occidental Petroleum Continues to Target Higher Prices

Bruce Kamich
May 16, 2022 2:52 PM EDT

Here's our first price target and our long term objective.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:24 PM EDT PAUL PRICE

    An interesting chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login