By Sean Hannon, CFA, CFP, of EPIC Advisors from Covestor.com.

On rare occasions, charts do show clear patterns, making a trading strategy obvious. Even more unique is a chart that reveals a multitude of patterns whereby an investor can profit from both the long and short side of the market. With First Solar ( FSLR), we have such a chart.

As I describe each week in my weekly newsletter EPIC Insights, reading charts is often more art than science.

If you put groups of analysts together in a room and ask them to determine patterns from a package of charts, expect to hear a plethora of responses. With each person bringing his or her point of view to the table, the patterns will be disputed and answers shall remain inconclusive.

First Solar is among the most profitable manufacturers of solar modules. Having earned $158 million in 2007 and estimated to earn over $300 million in 2008, FSLR offers the rare combination of a high-growth company in a developing industry and positive income. Add in the intention of the Obama administration to expand spending on alternative energy, and FSLR should see business improve for years into the future.

While the fundamentals of FSLR's business are strong, this article concerns itself with technical trades. According to the chart, FSLR embarked on a long rally that took the shares from $94 in September 2007 to $311 in May 2008 (231%). As the stock consolidated for a few months, we see the development of a traditional fan.

When the final fan uptrend was broken, the bull run of the stock ended and the price plunged from $282 to a low of $87 (69%) in three months. As the stock bottomed and began heading higher, a triangle formed.

In textbook fashion, the tip of the triangle resulted in a decisive move, with the stock skyrocketing 20% in two weeks. Since that point, the stock has consolidated, retested its 50-day moving average and bounced higher.

With so many patterns to choose from, FSLR offers an excellent example of how simple, technical analysis can lead to outstanding results. By taking what the charts give us, we can be both long and short of this stock at the proper times.

With the retest of the 50-day moving average and the subsequent move higher, FSLR is poised to rally. I expect a retest of the most recent highs ($165) and believe there is a reasonable chance the shares will push toward the 200-day moving average ($215). With positive business prospects and a bullish chart pattern, I recommend buying FSLR as this week's technical trade.
At the time of publication, Sean Hannon was long FSLR. Positions may change so click here to view their current portfolio. Sean Hannon has their investment record verified by Covestor.com. Visit Covestor.com to track the real investments of thousands of proven self-investors live for free.

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