First Solar shares tumbled 8% Friday to close at $116 after the company gave a poor outlook beyond the June timeframe. During a post earnings conference call CEO Robert Gillette stated "orders look very strong up until June." Couple this in with pricing pressure in the industry and expected subsidy cuts solar panel makers get from the German government, and traders put a gap down on most solar names for the day. Let's take a look at the chart:
From a technical standpoint, FSLR broke down below a long term support area noted by the red arrow. Shortly after a nice rally brought price back in the range of the triangle. Unfortunately the 50 day simple moving average along with an overbought reading on the stochastic oscillator brought Friday's drop back below support. Other stocks in the solar group showing similar price action include ESLR, DSTI, ASTI, ENER, and LDK.