It's been just a month and a half since I brought to light some turnaround stories for the second half of 2018. Since then $VSI has soared some 90% hitting my $12 level and then some.
$OLED was $88 in early July and is now $121 up some 40%.
$GME is up 13% and in the midst of an incredible multi-day rally, breaking through a long term downtrend in emphatic fashion.
$GME still has plenty of room to head higher. I also think $VSI is consolidating for another leg up. And $OLED, anyone who has listened to me discuss $OLED knows, even when it was an $80 stock, that I think its going over $200 again in 2019. Needless to say it's been a very exiting summer so far.
However the final turnaround story from my article last month has yet to rally. Not only hasn't it rallied the, stock is down almost 8% since I highlighted it. However I think its time is coming as well. Let's be nice to the late bloomers. Sometimes the late bloomers are the best of all!
That late bloomer is $FSLR. Today I opened up some short term call options, and over the next few weeks I plan on entering some longer dated options for a possible move higher. This is a stock that was in the midst of a massive rally to over $80 a share. And then the wheels came off, and oh boy did they come off. When all was said and done $FSLR dropped almost 40% in the span of a few weeks. The news flow out of $FSLR has been quite negative. That's like saying the rain was wet. Their recent earnings report was a bust too, missing expectations by a wide margin. Supply is a big word. Too much of it. Tariffs. China policy reset. There are plenty of excuses to sell.
After a bevy of negative headlines $FSLR has settled down just above the $50 level. It's a simple set-up from a chart perspective. Long term support rests at the $48 level. A break of that ends any bullish scenario for the stock. I don't think that is the likeliest outcome right now otherwise I would have never entered calls. However nothing is ever 100% certain, except that rain is wet..... let's move on...
$FSLR respected support on its dive from $80+. Despite an ugly earnings report the stock has managed to keep its head over the $50 level as well as long term support. Momentum looks to be turning after a sideways battle in the lows $50's. I think the stock is on the cusp of an upside break. Being in the shorter dated calls I obviously want the move to come right away and it looked like it earlier today. However the stock gave up all its gains and then some into the close.
My perspective is that the stock has priced in all the negative and now is discounting the positive that lies ahead. I'm not alone. This morning the stock was reiterated a top pick at Baird:
| First Solar remains a Top Idea at Baird | |
| Baird analyst Ben Kallo said he continues to like First Solar shares and he believes its 2020 earnings power may be underappreciated. The analyst sees the potential for upward earnings revisions as management recently provided a favorable update on pricing. He noted the company's differentiated technology and its lower valuation relative to peers. Kallo said First Solar remains a Top Idea, and he reiterated his Outperform rating and $85 price target on the shares | |
Earlier this month JP Morgan added the stock to its focus list with an overweight rating.
| First Solar added to Analyst Focus List at JPMorgan | |
| JPMorgan analyst Paul Coster added First Solar to his firm's Analyst Focus List as a near-term idea. The recent pullback in the shares, induced by the Chinese policy reset and "weak" Q2 results, presents investors with a buying opportunity, Coster tells investors in a research note. The analyst views Fist Solar as "best-in-class" in the solar space, with "industry-leading" gross margins, balance sheet, and visibility reaching through 2020. He calls the stock a top pick within his Alternative Energy coverage. Coster keeps an Overweight rating on the name with a $79 price target | |
Both analysts have price targets projecting some 50% of upside from current levels. I am trading for a more reasonable 20-30% into the fall.
I think when $FSLR starts it move back over $60 it will come quickly, much like the move from late last year from these same levels that sparked a rally to over $80 a share.
I will be looking out for longer dated options to capitalize on this move.
As for $VSI, $GME, and $OLED I think they all have more upside coming into the fall, with $GME with the most shorter term upside potential. I think there is a very good chance some sort of deal gets announced for $GME over the next few weeks that puts a 20-25% premium on the shares from current prices, with the ultimate landing zone $20-22 into the fall. Which is what I said at the start of July.
As I did with Gamestop a few weeks ago, and $VSI, I will have a more detailed report on FirstSolar over the next few weeks.