TSL), but across-the-board big trading days. Twice the average daily volume was the norm for solar stocks on Monday. In the case of LDK Solar, more than 16 million shares were traded, versus an average daily volume of less than 5 million shares. Implicit in the Goldman Sachs upgrade of First Solar was a "long-term structural thesis" about the solar bellwether. Therein lies the problem for any solar stock and any potential solar investors. Solar stocks have been anything but long-term investments, with fast money and sentiment shifts dominating sector action. Analysts are working overtime to make the case for solar as a "here to stay" long-term sector, but even if that's a compelling case measured in years, it doesn't mean that in the coming months there won't be one more turn back to the negative in solar trading. Solar stocks are up for a variety of good reasons. For one, multiples had fallen to extremely low levels, with many Chinese stocks trading at five times earnings, or even less, and the group as a whole at 10 times or under, with the exception of First Solar. Even getting back near the $30 level, Trina Solar is still trading at below 10 times earnings. There was room to move up for stocks which had experienced significant multiple compression in 2010. In 2010, earnings improved along with the global demand outlook, yet multiples compressed regardless. It's always about what's next on the horizon in solar, and when the present is all bullishness, it's often meant in the past that the horizon is darkening. It's not just multiple compression that's part of the fuel for the rebound in solar. There are three historical triggers for bullish solar trading that have converged currently: the euro, subsidy risk alleviating, and the price of oil.
Eric Rosenbaum. >To follow the writer on Twitter, go to Eric Rosenbaum. >To submit a news tip, send an email to: email@example.com.