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LED’s Finally Showing Some Life

|Includes:Arch Coal Inc (ARCH), BTUUQ, CNX, CREE, FCX, GOOG, GTLS, HPQ, MEE, RBCN, VECO, WLT

 HedgeFundLIVE- The LED’s have been showing some life the last few day’s and I’m beginning to like what I see.  The analyst community has been starting to speak up the last few days with the most recent upgrade coming from Merriman this morning.  Merriman upgraded CREE to Buy from Neutral and although the technicals are bearish I really like the long term story. 

Although CREE, RBCN, AIXG, and VECO have shown strength the last few days and you have to liek the price action there was one story in Digitimes that caught my eye.

Prices for LED lighting products are expected to drop continually over the next two years and demand from the North America and Japan markets will be growing, according to industry sources in Taiwan.

In 2011, retail prices for 7-8W LED light bulbs, which can replace 40W incandescent bulbs, are expected to fall from US$20-25 in the fourth quarter of 2010 to US$10-15, and models that will replace 60W incandescent bulbs will drop from US$35-40 to US$20-25, the sources said.

The negative story with the LED’s has always been the pricing and in my opinion this story is very bullish for growth in CREE and the LED story overall.  I’ve blogged about Digitimes being the catalyst in the LED’s once before and it turned out to be a great call. If the market behaves, I think you can feel comfortable buying CREE or a basket of LEDS into 4/19/11 when CREE reports Q3 earnings.  In the past CREE has been pretty awful on their call so I would lighten up into the report but I think the road ahead should be nice for the LED’s. 

Other Names Showing Relative Strength Today:  HPQ, FCX, WLT, CNX, BTU, ACI, ANR, MEE, GTLS, and MMI.

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