NEW YORK ( TheStreet) -- Talking about short selling is risky when the overall market is probing at a higher level. In the past few days, U.S. stock indexes continue to refresh at record highs. We have had this rally since mid-October, after a huge panic sell-off. Now, all the major indexes have not only repaired the damage, but they have all risen above the previous high point.
So, why go short when the market is bullish? Well, not all stocks are receiving the same treatment from buyers. Some stocks continued to suffer selling pressure, because they are relatively weak compared to the market.
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The entire solar energy sector is under huge pressure lately. First Solar (FSLR) is a brand name in its sector, yet it is the weakest performing stock compared to its peers. In its third quarter report, the Arizona-based solar panel company posted earnings of 87 cents per share, soundly beating Wall Street's estimates of 64 cents. But its revenue missed the mark. First Solar reported revenue of $889 million, down nearly 30% year over year and below Wall Street's expectations of $1.06 billion.
After releasing its earnings report, First Solar plunged and tested its major support area of $50.
If you look at the weekly stock chart below for First Solar, you will see the company is now trading below its uptrend line from the mid-2012 period. During that time, First Solar tested its $70 resistance area three times but failed to push-through. Then in October, when the markets were in a state of panic, First Solar suffered a serious sell-off. Its shares fell to the $63 range. It attempted to recover, but its disappointing earnings again punished the stock.