This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Two Energy Stocks Likely to Make It

Stocks in this article: FSLR LDK CSUN SPWRA TAN WPRT

By Quint Tatro, Minyanville contributor

NEW YORK ( Minyanville) -- The promise of the solar sector has been spotty to say the least. From a fundamental standpoint, there have been many fits and starts, closing of plants, consolidation, and government subsidies to try to keep the dream alive.

Compressed natural gas is also an arena that has the potential to solve many of our energy needs and has yet to reach its full potential. In the end, there will be a few successful companies that make it through the gauntlet and deliver the energy needs of the next generation. I want to revisit two names I see as poised to capitalize on the demand.

First Solar (FSLR) is perhaps the best-known solar company in a fast-changing arena. In the 2007 bull market, First Solar ran up tenfold on brightening prospects for the solar names. With competitor LDK Solar (LDK) reporting outsized earnings on Monday, the entire sector enjoyed a nice pop. (First Solar reports on February 17.) From a chartist's viewpoint, many names are particularly attractive at current levels. In fact, I have positions in China Sunergy (CSUN), SunPower (SPWRA) and Guggenheim Solar ETF (TAN) for my clients.

More from Minyanville
Minyanville's T3 Morning Call: In Resting Market, Stock Selection Is Key
Warning: 2011 Could Be Worse Than 2008
How to Calculate Your Returns From Dividend Stocks

The only fly in the ointment for First Solar has been the manic action it has undertaken over the years. From a high north of $300 in 2008, First Solar has oscillated in a wide range, touching $85 the same year. Since the market bubble has seemingly subsided in its extreme emotional reactions, First Solar's chart has tightened up to the point that it has once again become attractive. On the weekly shown above, First Solar is holding above the key long-term 50-period moving average, which is flattening after a two-year descent. Also visible are the ever-narrowing price swings that made holding First Solar a nightmare.

With the tightening pattern, prudent stops can now be put in place that don't expose a trader's capital to undue risk. While I'm not currently an owner of First Solar stock, I like the risk/reward at these levels with two separate areas for stops highly visible. The recent swing low around $120.90 could be a wider stop, or traders could use the flattening 50-period, which is currently around $127.50. Either way, First Solar is one to watch in the solar arena.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs