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
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