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Prices soared for solar stocks in September. In October, volume has soared…but prices have swung sharply downward after a very strong start to the month. In most cases, solar stocks have lost all their gains for the month and then some. This trading action is creating buying opportunities, especially where uptrends and/or critical technical support remain intact. Forthcoming earnings news and the headwinds from a potential trade dispute between the U.S. and China over green energy exports will certainly generate additional volatility.

I was so struck by the surge in volume on solar stocks this month that I decided to post the charts I find most noteworthy. In most cases, the volume surges are quite dramatic. Each chart covers roughly the last seven months and are posted in descending order of Tuesday’s one-day performance. All the charts are annotated and some include additional commentary below the graphic.

First Solar (NASDAQ:FSLR)
Still in breakout territory but down for October

Still in breakout territory but down for October


Memc Electronic Material (WFR)
If WFR breaks support at 200DMA, 50DMA needs to hold to keep it a buy

If WFR breaks support at 200DMA, 50DMA needs to hold to keep it a buy

WFR is one of the few solar stocks still up for October. It is also in breakout territory, making it a good risk/reward buy once selling calms down.


Jinko Solar (NYSE:JKS)
Critical first test of the 50DMA

Critical first test of the 50DMA

Canadian Solar (NASDAQ:CSIQ)

One of the few solar stocks that has failed to break through the 200DMA

One of the few solar stocks that has failed to break through the 200DMA

Evergreen Solar (ESLR)
Cooling off after a sharp 2-day parabolic move

Cooling off after a sharp 2-day parabolic move

I nibbled on some more ESLR on Monday’s open when the stock pulled back sharply. I am likely done scaling into the stock as I want to keep the position small until I see solid news supporting last week’s strong move.


Trina Solar (NYSE:TSL)
Sharp correction not likely to end at 50DMA

Sharp correction not likely to end at 50DMA

Not shown here is that the recent highs in TSL retested the all-time highs. This failure is a bad sign, so support either at the 50DMA or, more likely, the 200DMA, needs to hold to stave off a steeper and more prolonged decline.

Suntech Power Holdings (NYSE:STP)
In danger of retesting the 52-week lows

In danger of retesting the 52-week lows

STP has not been able to shake its persistent downtrend during 2010. A break of the 50DMA support will likely signal a swift retest of the 52-week lows.


Solarfun (SOLF)
Swift breakdown signals imminent test of the 200DMA

Swift breakdown signals imminent test of the 200DMA

GT Solar International Inc (SOLR)
50DMA needs to hold as it has not broken in almost 4 months

50DMA needs to hold as it has not broken in almost 4 months

Yingli Green Energy Holdings (NYSE:YGE)
Nice breakout has quickly devolved into critical test of support

Nice breakout has quickly devolved into critical test of support

ReneSola Ltd. (NYSE:SOL)

All October

All October's gains have now vanished

This pullback is SOL’s steepest since the May-June swoon. Given it is at such lofty heights (best solar performer of the year), I prefer to wait out earnings before making any buys.


JA Solar (NASDAQ:JASO)
Very ominous swing downward

Very ominous swing downward

JASO’s steep sell-off has done serious technical damage. Some consolidation at critical support will go a long way to repairing the technical outlook. It is very positive that selling volume has remained relatively in-line with the earlier surge in buying volume.


LDK Solar Co Ltd (NYSE:LDK)
Heavy one-day drop did not break the uptrend

Heavy one-day drop did not break the uptrend

I am watching this one very closely. LDK raised revenue guidance on October 11 from $570-600M to $610-640M and gapped up 9% before closing the day up 16%. This gap is still holding, and I will be watching the stock’s behavior at or near this gap very closely for trading cues. It is a positive sign that buyers are still “out-voting” the sellers.

Be careful out there.

Disclosure: Long FSLR call spread, long WFR, long TSL calls

Source: Trading Volume Soars for Solar Stocks but Leaves Prices Behind