News Escalates Technical Event in Solar Stocks (FCEL, STP, ESLR, SPWRA, YGE, TAN, FSLR)

We recently have noticed how more and more solar companies are seeing big gains on news, particularly in those which have recently raised cash in a seondary offering.  We are starting to see further chart and technical events in FuelCell Energy Inc. (NASDAQ: FCEL), Suntech Power Holdings Co. Ltd. (NYSE: STP), Evergreen Solar Inc. (NASDAQ: ESLR), SunPower Corporation (NASDAQ: SPWRA), and Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) as the 200-day or 50-day moving averages are now in the rear-view mirror. Where this gets interesting is that the solar ETF, Claymore/MAC Global Solar Energy (NYSE: TAN), has crossed above its 200-day moving average in recent days as shares are at $10.93 and that 200-day moving average is $10.15.

FuelCell Energy Inc. (NASDAQ: FCEL) is is up big on word that POSCO Power ordered 30.8 megawatts of FuelCell Energy Modules and components, with estimated value of $58 million.  POSCO Power will also purchase $25 million in FuelCell Energy common stock at $3.59 per share, which represents the 10-day average of FuelCell Energy stock) upon the finalization of this agreement.  While that is not a secondary offering, this is already a 33% profit on the investment in one day if everything were to close immediately.  FuelCell is trading at $4.92, and it has now crossed above the 200-day moving average of $4.00.

Suntech Power Holdings Co. Ltd. (NYSE: STP) is trading up 7% at $18.22 on hopes for a large pact in Mongolia and China.  Suntech priced a secondary offering of 20 million ADS’s at $12.50 per ADS in late-May, so those holders have cleaned up.  Suntech Power crossed above its 200-day moving average last week and today that level is $16.60.

Even Evergreen Solar Inc. (NASDAQ: ESLR) is up almost 6% at $1.94 on the day, which is now above the May secondary offering of $1.80 per share for a total of 42.55 million shares.  This one still has significant resistance above as its 50-day moving average is $2.12 and the 200-day moving average is $3.08.

SunPower Corporation (NASDAQ: SPWRA) sold 9 million shares at $22.00 each in late-April, and it also sold $200 million in convertible notes at a 4.75% annual rate which had a conversion price of approximately $26.40.  With a gain of more than 4% to $31.20 today, these shares are also considerably higher than the offering.  SunPower even announced that Jabil Circuit, Inc. (NYSE: JBL) would manufacture solar panels for the company in Mexico.  This one is well above teh 50-day moving average of $26.79, but its 200-day moving average is not until $39.36.

Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) is up almost 5% at $16.03 after signing a North American and international supply pact with Recurrent Energy.  This one crossed above its 200-day moving average last month and has refused to look back.  Some might call this one a bit overbought, but its 50-day moving average is $8.93 and its 200-day moving average is $7.32.

First Solar Inc. (NASDAQ: FSLR) has been above its 200-day moving average since late-April, and its stock has actually been range-bound between $180 and $200 since and $180 and $190 on a shorter-term basis.

We have frequently referred to solar stocks as leveraged energy investments and leveraged oil trading instruments, and with oil back around the $70.00 mark that appears to be coming more and more true.

Jon C. Ogg
June 9, 2009