Solar stocks show strength

This post was written by Minyanville contributor Sean Udall

Maybe the charts will take care of this decision for frustrated investors. Nothing ends selling and starts buying like a spiky MACD right cross.

And maybe the group move (lower) was just one massive liquidation trade and the biggest of the machines knew where the weakest hands were the most susceptible to letting shares go to meet redemptions.

I suspected this was the case in solar with companies like First Solar (NASDAQ: FSLR), SunPower (NASDAQ: SPWRA), LDK SolarLDK), MEMC Electronics (NYSE: WFR) and Suntech Power (NYSE: STP). The companies have no funding issues, big industrial projects, and are sold through for years.

I'm actually inclined to buy the strength as we have oil down, and a new month of us. We are also in an environment where little hard analysis from the analyst community has been fostered. Simply put, speculation of a macro condition (credit crunch), has been liberally applied to micro condition sets for an industry in an early growth phase. So basically a coin has been tossed in the air and the analyst community has mostly called a negative outcome. A few bullish holdouts exist but by and large this looks like a group think nightmare in every direction so far.

I still like most of the big guns and a couple smaller shops but I've always been cautious of names in need of funding and that is more critical now. Also, an Obama victory trade on the group might fade very hard just as the bailout passage was.