Seeking Alpha

Dr. Duru

 
View as an RSS Feed
View Dr. Duru's Comments BY TICKER:
Latest  |  Highest rated
  • Solar, fuel cell stocks off sharply after OPEC stands pat [View news story]
    Momentum contains its own logic. While oil is not the major generator for electricity in the US (I can't remember numbers in some of the emerging markets solar companies have been going after), solar is suffering by "guilt by association" as the entire energy complex is essentially in freefall. Looking at prices, energy is cheap and abundant in every carbon-based form across the planet, making solar (and other alternative energy) less and less attractive on a relative basis. Traders and investors are probably trying to get ahead of what they think will be a renewed plunge in PV pricing as well. Yes, it may be short-sighted, but that is the pricing reality in the moment. Solar stocks have been very resilient up until now. If you are bullish, pick your entries carefully and stay patient....
    Nov 28, 2014. 11:52 AM | 1 Like Like |Link to Comment
  • Warning Signs Mount For Solar Lease/PPA Holding Companies [View article]
    The U.S. dollar's secular trend over decades is weakness NOT strength. Check out St. Louis Fed data: http://bit.ly/1FraY5e

    Where did your data come from?

    I think your argument basically boils down to an argument that interest rates are artificially low and will not stay depressed much longer. The implications reach far and wide. But it is not clear how much the US economy can tolerate much higher rates. Just look at how the Bank of England has had to back down off its earlier brave talk about rates likely going higher sooner than the market expects...
    Nov 26, 2014. 01:15 PM | Likes Like |Link to Comment
  • Factoring Fear Into Canadian Solar Valuation [View article]
    I give you Netflix as a related example. It is currently selling off with no news until finally today an analyst comes out and downgrades saying low 300s is a safer entry point. Absent anything else, it will be natural for traders to think that "someone knew" about the downgrade and started selling ahead of it. But that conclusion is only possible because we simply have nothing else to go on. And I am guessing the huge irony could be that the analyst downgrade will finally mark a climax of the selling (to be seen).

    We are used to getting reams and reams of publicly available info on stocks. But sometimes sellers and buyers are doing things for reasons we may never understand or find out. One of the big reasons why I always check technicals - buying and selling patterns can't hide from the charts...
    Nov 25, 2014. 10:19 AM | 1 Like Like |Link to Comment
  • Factoring Fear Into Canadian Solar Valuation [View article]
    But a lot of stocks have since recovered and recovered nicely. So, the fact CSIQ was not able to jump over the technical hurdles in the rally makes holders/traders even more nervous. Moreover, CSIQ's last rally is now a lower high, adding more nervousness to folks following charts.

    This is of course all tea leaves and crystal balls since we will never be able to interview the sellers, but I like using the chart to check the story. Until CSIQ overcomes the technical hurdles, it will stay very vulnerable to what anyone interprets as negative news. In that sense, I definitely agree with you that it could take months for this chart to "heal."

    On the other side, CSIQ's ability to avoid sympathy selling after TSL's post-earnings selling is another sliver of good news, I think.
    Nov 25, 2014. 10:16 AM | 3 Likes Like |Link to Comment
  • Factoring Fear Into Canadian Solar Valuation [View article]
    I think you are giving Johnson too much credit for triggering the selling. I suspect it was much more coincidental. Johnson has gotten a LOT of solar calls wrong and is essentially a solar permabear, so no need to believe that this particular time someone (or people) with a lot of money at stake became willing to take such a large risk. Even moreso given the weight of positive commentary from the overall analyst community.

    Technicals could explain the selling much better: essentially selling at critical junctures can beget more selling (same on the bullish side with buying). And I am saying this because this is how I was trading CSIQ at the time. The stock rallied into its 50-day moving average (DMA) post-earnings, but did not break through. That is point #1 for selling assuming resistance will hold firm. The subsequent break through the 200DMA makes the stock look even weaker and makes any bad news available in the earnings stand out louder. By the second day, you have the rest of the "fearful" bailing in order to prevent further losses. The good news is that the selling ended almost as quickly as it began. No mass exodus is underway. But those resistance levels still loom overhead and don't be surprised to see a repeat (likely with lower volume), if buying strength fails to punch the stock convincingly through those levels.

    I will add that CSIQ is printing a classic pattern called a bearish "head and shoulders." I see more of these patterns fail to work than succeed, so I don't pay them a lot of mind anymore. However, when these patterns DO hold firm as tops, the subsequent selling can be pretty convincing.

    This whole episode certainly caught my attention as I ahve been trying to get back into the solar space (I used to follow FSLR and TSL in particular very closely). Good article on trying to address these events from the fundamental side of the fence.
    Nov 25, 2014. 01:06 AM | 1 Like Like |Link to Comment
  • Australian Dollar Loses Steam From Surprise China Rate Cut [View article]
    Maybe you were not surprised, but the rest of the market acted surprised at the time. I am judging based on market response.

    In other news, AUD/USD hit 0.86 by the time this got published. I exited my short AUD/USD position at that point in anticipation of the current range holding. A breakdown/breakout from the range will change my approach.
    Nov 24, 2014. 12:57 PM | Likes Like |Link to Comment
  • A Good Time For Adjusting The Bearish Trading Strategy On The Japanese Yen [View article]
    Agreed. They are dangerously close to losing control of the currency. This was always a risk given the massive nature of the QE and the overt comfort with massive printing. The only way to intervene at this point would be to dip into reserves and buy yen (I am not sure where reserves are right now) and/or hike interest rates. Neither are good options. A rate hike would be particularly damaging to an economy which is still having trouble moving with zero rates.
    Nov 23, 2014. 12:28 PM | Likes Like |Link to Comment
  • Go Where It Is Darkest: When Company, Country, Currency And Commodity Risk Collide! [View article]
    You should have compared VALE to RIO, not BHP which is a much better diversified miner. I am also surprised that you didn't take into account competition in your analysis. With global supplies ramping a doomsday scenario should include the possibility that the "big three" succeed in driving iron ore down to marginal cost of production before the bottom finally hits. In the rosy scenario, Chinese monetary policy loosens sufficiently to facilitate several more years of over-building and infrastructure spending and sending iron ore sky-high again...
    Nov 22, 2014. 01:35 PM | 2 Likes Like |Link to Comment
  • Buy The Dip On LGI Homes [View article]
    Thanks for the kudos. I almost missed this one. Hang in there though. As I mentioned, stabilization after this kind of selling on a low-volume stock could take a while. For example, LGIH is not participating in today's nice breakout for ITB. Regardless, I am in now and will look to accumulate shares over time. 2015 guidance will be extremely important.
    Nov 20, 2014. 03:07 PM | Likes Like |Link to Comment
  • A Closer Look At First-Time Home Buyers: Trends And Prospects [View article]
    I meant to add one other point on saving. The problem with renting in many areas of the country is that it has become so expensive relative to incomes that saving for that first home has become more difficult in many cases. I covered the numbers on this in an earlier post. Existing homebuyers of course do not have this problem and have a relative purchasing advantage if they can bring equity from a previous home to the table. The price recovery in many markets has allowed existing owners to do just that.
    Nov 19, 2014. 09:17 PM | Likes Like |Link to Comment
  • A Closer Look At First-Time Home Buyers: Trends And Prospects [View article]
    On a year-over-year basis that is an improvement. Cancellation rate was 31% in the year-ago quarter. That is a better comparison. Also note that cancellations can move up and down for many reasons, including the aggressiveness of the salesforce, the amount of and quality of the foot traffic a builder is getting, and the relative attractiveness of homes from other builders.
    Nov 19, 2014. 09:12 PM | 2 Likes Like |Link to Comment
  • A Closer Look At First-Time Home Buyers: Trends And Prospects [View article]
    I think these kinds of problems occur throughout the economy at different times and different locations. It definitely makes sense to rent housing when employers are renting you... The bigger problem is if these same workers cannot save enough in their jobs to buy a house when they do move on to the next job in a place they feel comfortable and secure settling down.
    Nov 19, 2014. 09:08 PM | Likes Like |Link to Comment
  • A Trader's Perspective On The 'Save Our Swiss Gold' Initiative [View article]
    I think that is a poor reason to load up on euros and gold. I would fade the euro on that (I have been fading the euro for a while anyway). As I stated in the piece, I am definitely not interested in shorting gold....
    Nov 18, 2014. 11:32 AM | Likes Like |Link to Comment
  • A Trader's Perspective On The 'Save Our Swiss Gold' Initiative [View article]
    Interesting. I am not familiar with the ins and outs of Swiss law, so I am wondering what legal ground the SNB would have to reject the referendum if it passes by vote and then the Cantons.
    Nov 18, 2014. 11:31 AM | Likes Like |Link to Comment
  • Why The Aussie/Yen Currency Pair Presents An Interesting Opportunity [View article]
    I agree that this is a great long opportunity. I would reduce the reasons to simply the yen is getting shredded by its central bank, the yield on the Aussie remains relatively high, and the RBA has yet to figure out how to push the currency any lower.
    Nov 14, 2014. 12:24 PM | Likes Like |Link to Comment
COMMENTS STATS
1,495 Comments
405 Likes