Solar stocks had another blowout week led by LDK Solar’s (LDK) 25% gain. First Solar (FSLR), Sunpower (SPWR) and Suntech Power (STP), what I consider the first-tier solar companies, all had a gain close to or above 20% for the week.

Also, interesting to note is that First Solar is now the only Solar stock that has a positive gain in 2008. Sunpower (SPWR) and Suntech Power are still about 30% and 40% down in 2008 respectively.

Solar stocks capped a fantastic week with every solar stock except one (WFR) clocking a double digit gain. This seems like the best week solar stocks have had this year but are still far off from where they started in 2008.

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There is no good way to put this but solar stocks have been beaten down pretty badly since the start of 2008. There was some irrational exuberance when it came to solar stocks in 2007. This downtrend was inevitable, but the overall market conditions might have made it worse than it should have been.

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Just like the overall market, Indian ADR’s have struggled since 2008 rolled in.

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Citigroup (C) may cut up to a fifth of its 450 branches in India. Additionally, Citigroup may even move some of its ATM branches to less expensive locations.

One of the big benefits that Citigroup has in India is its brand name that comes from being a global behemoth. All of the subprime news, and cost cutting could negatively affect its brand name in India. Moving away from expensive locations will also affect Citi’s brand.

Kaydon Corp. (KDN) handily beat its earnings estimate when the company released its 4Q numbers on February 21st. Earnings per share [EPS] came in at 70 cents per share beating analysts estimates of 59 cents. Even if we add in the 9 cents per share one time gain from the sale of part of its friction control unit, Kaydon still beat the estimate by 2 cents.

The market initially reacted positively with Kaydon gaining as much as 8% but the stock gave up all of its gains and closed the day in red.  The stock is basically sitting at where it was before the earnings report on Thursday.  I am looking at this week to see how the stock reacts in the short term. Kaydon has been severely punished since the the start of the year with the overall market and in particular the alternative energy sector.

The chart below tells us more than the performance of the U.S. listed Indian stocks in 2007. What it tells us is just how strong the Indian economy is and the rise of the Indian consumer.

The companies that targeted the local Indian consumers and the local Indian market emerged as the clear winners in 2007.

What can you say about a sector when the worst performing stock clocks a gain of 50% in 2007? I am obviously overlooking the the one negative in the chart below courtesy of Energy Conversion Devices (ENER).

Crude Oil appreciating 78% only helped the cause for these companies in 2007.

There is a new Prime Minster in Australia. Kevin Rudd is replacing John Howard, who was in the office for almost 12 years. So why am I talking about some political news out of Australia on an American financial blog? Well it all has to do with the environment.

Kaydon (KDN) got punished Monday after it’s profit slipped and the revenue number came in below analyst expectations. After a big initial intraday drop below $50 on Monday, the stock has recovered nicely and closed the day today $53.79. It’s still down from it’s $55.30 pre-earnings price. I think there is an opportunity here, especially if it goes back below $50.

I sold my Call Options on Friday before earnings since I had a nice profit and didn’t know what to expect with the earnings call. It was just a gut call since I have only held and followed this company for a short time. I would prefer to buy some long term calls again, especially if it goes below the $50 mark.

BSE Sensex roared back this past week by gaining almost 10% week-over-week. The previous week’s 5% drop didn’t really mean anything as the Indian market is showing no signs of slowing down.

Just look at some of the gains this week.

Sensex, India’s Benchmark Index, is up 33.60% YTD. However, about 30% of those gains have come during the last 8 weeks. Overheated?

Also, I just noticed that the one stock that no one talks about (including me) is the Telecom Giant Videsh Sanchar Nigam Limited (VSL). VSL is up about 44% YTD.

Indian stocks continued their strong run last week as the BSE Sensex touched an all-time high of 17,361.50. Sensex, Bombay Stock Exchange’s benchmark index which consists of 30 companies, is up about 25% year-to-date.

Not all US listed Indian stocks have benefited by the strong run in the Indian markets. If you look at the chart in the previous article you will see that the strong performers have been the Indian Banks, HDFC Bank (HDB) and ICICI Bank (IBN) and the Indian ETF (INP). The newly listed Sterlite (SLT) has also performed well. However, IT, Outsourcing and Internet stocks have all under-performed.

I realize most of the stocks were up this past week but just look at the Solar Sector was a whole. WOW!

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SiRF Technology (SIRF) got hit hard Wednesday after a nice little run the last few days. According to this unconfirmed story in TheStreet.com, Apple (AAPL) will be releasing a GPS capable 3g iPhone early next year using a competitors GPS chip.

The GPS chips will be provided by Global Locate which was recently acquired by Broadcom (BRCM). The GPS chip made by Global Locate is an ‘Assisted’ GPS or A-GPS chip that uses a combination of satellite and cellular signals. This results in a better performance indoors and places where there is no direct view to the satellite. Assisted GPS chips are ideal for mobile phones. Nokia (NOK) is already on board with Assisted GPS technology.

Amazing turn of events for First Solar Thursday.

Goldman Sachs initiated coverage on First Solar (FSLR) with a ‘Buy’ rating and six month price target of $125. Goldman Sachs analyst, Michael Molnar, said he’s bullish on the solar sector for the next six months, as he expects increasing demand relative to supply and news on continued government support of solar energy efforts. However, he further went on to state that solar oversupply is possible in mid-to-late 2008 but believes in an oversupply situation, he prefers First Solar because of its manufacturing efficiencies and low production costs.

Wall Street Journal is out with a bullish article on the Indian Banking sector (sub. req.).

Following are the key points from the article:

Crude Oil 4.19%

Nasdaq 0.76%

Dow -0.16%

S&P 500 -0.36%

JA Solar (JASO) 12.83%

Trina Solar (TSL) 11.64%

HokuLoading... Scientific (HOKULoading...) 8.34%

Ascent Solar (ASTI) 7.98%

SunPower Corp. (SPWR) 7.56%

First Solar Inc. (FSLR) 6.35%

Evergreen Solar (ESLR) 4.06%

MEMC Electronics (WFRLoading...) 3.51%

Daystar Tech. (DSTI) 3.03%

SunTech Power (STP) 2.14%

PS WILDERHILL ENR (PBW) 2.07%

Canadian Solar (CSIQ) -0.12%

Solarfun Power (SOLF) -4.93%

Spire Corp. (SPIR) -6.53%

China Sunergy -7.78%

Energy Conv.(ENER) -13.08%

I wrote about the growing issues China is having with pollution back in January after reading about it in Knowledge@Wharton. That article got nice coverage after being featured on SeekingAlpha.com and mentioned on the TheStreet.com. The two picks I mentioned in that article FuelTech (FTEK) and Suntech Power (STP) have both seen their ups and downs but I believe are still trading higher right now. I also mentioned American Superconductor (AMSC) as another possibility and AMSC has actually more then doubled since then. I actually owned all of these stocks at one point or the other and made nice profits along the way. Although, the real move in FuelTech (FTEK) happened after I gave up on it (since I owned Options). Anyway’s, back to the real reason I am bringing up this topic again.

New York Times has an excellent piece on this very topic featured on its front page titled, “As China Roars, Pollution reaches Deadly Extremes“. It’s well worth reading but I’ll highlight some of the key points below: (It won’t help the Chinese readers since not only New York Times is blocked but so is my own site FinancialNirvana.com). You can check to see if a site is blocked in China by using the GreatFirewallofChina.com)

Awright, let’s just stay calm here! Don’t get all crazy on me!

For a while now I have gone completely to trading Options. If I am long a stock I will buy the Calls that expire well in the future (December or beyond if I am buying right now). If I am short a stock even then I will buy PUTS that expire well in the future, just in case. Occasionally, I will buy short term PUTS. At worst, buy some cheap PUTS (low Delta) to protect your long positions.