First Solar (FSLR) is scheduled to report earnings after the close of trading Thursday but the stock price has soared higher on the heels of the announcement of a climate spending deal reached in Washington, D.C. I have no idea how the earnings numbers will be received after a 15% price increase but let's try.
A check of the charts is in order.
In the daily bar chart of FSLR, below, we can see a big upside price gap and wide trading range for the shares Thursday. Prices gapped above the 200-day moving average line but were already trading above the rising 50-day moving average line.
The daily On-Balance-Volume (OBV) line shows some quiet improvement from early March. The Moving Average Convergence Divergence (MACD) oscillator has just moved above the zero line for an outright buy signal.
In the weekly Japanese candlestick chart of FSLR, below, we can see some positive developments. The shares have traded in a consolidation pattern but it has broken out on the upside instead of the downside. Prices (not plotted) are trading above the declining 40-week moving average line.
The weekly OBV line has been steady the past four months. The MACD oscillator is turning upwards but has a long way to turning bullish.
In this daily Point and Figure chart of FSLR, below, we can see today's rally with no price gap -- the missing price data is filled in as if prices had traded. A price target in the $154 area is shown.
In this weekly Point and Figure chart of FSLR, below, we used weekly price data and came up with the same $154 price target from the daily chart.
Bottom-line strategy: FSLR could pull back to fill part of today's price gap. It is a bit of a stretch to come up with an area where buyers may come in but maybe the $85-$80 area. Once the pullback is over traders can probe the long side of FSLR.
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