Replacing Rene Sola with LDK Solar

ReneSola (SOL) jumped from up 14% to up 30% in a recent 75-minute period. The stock is now hitting resistance near $5 and I'm not going to look a gift horse in the mouth.

The stock has jumped from 1.7% of the portfolio to 2.4% just from today's appreciation, so I'm going to exit 75% of the position selling in the $4.80s with a shout out to President Elect Midas (anything he touches turns to gold) - also a thanks to his speechwriters. We're selling just under $4.90; 3000 of the 4000 shares we had. This will take us down to a 0.6% exposure. We are still sitting on some fat losses in all these solar names but less than yesterday.

I am being conservative here, and what I've noticed with solar stocks since I've gotten into them in 2006 is they lose money 90% of the time but in the 10% of the time they run, the speculators can make them double or triple in a few days or at most weeks. So a $5 SOL can be a $15 SOL by Jan 5th. But unlike the folks who play these stocks, I am not a riverboat gambler and I'm happy to take this appreciation and lock it in.

However, knowing the gamblers are around, I am going to replace the SOL exposure with LDK Solar (LDK) which is only up 6%. Tomorrow they can run up LDK Solar which is in the $13s and main resistance is just over $16. This can be done in 1 hour if Obama says "solar" anytime in the next 24 hours. Folks, that sounds facetious but it is not - infrastructure was a well-known Obama idea, but until he literally said it on Meet the Press, all of Wall Street was apparently ignorant Obama liked infrastructure.

I doubled the LDK Solar stake from 1.4% to 2.8% with purchases in the $13.40s. So if Obama touches LDK Solar on the forehead tomorrow, we have another win; if not - we kept the same solar exposure but locked in some big gains with SOL.


p.s. folks, we are still on track for the hedgie push to 'mark up' this market to S&P 920 by tomorrow at 4 PM. Push... push... push... the last few weeks of a blind SEC are upon us. Adult supervision might actually arrive in late January. The casino is threatened....

I am now coming to belief the stock market might be up 20% on Jan 20th; every 3-5 minute increment of "the speech" the market shall rise 1%. Remember, unlike the State of the Union which happens at night this will be mid day. You cannot stop his oratory; you can only hope to contain it.

Disclosure: Long ReneSola, LDK Solar in fund; long LDK Solar in personal account

Comments

[SolarGuru:]

LDK comprises a lot more than 2.8% of my portfolio. Then again, I'm in it for the duration. Good move!

2008 Dec 30 05:02 PM

[gebby:]

all chinese solars are good bets. they have the support of the chinese government as well. they are extremely depressed. sol resistance at 10, jaso at 10, yge at 10, stp at 16, ldk at 25. plenty of room on the upside.

2008 Dec 30 10:03 PM