Trina Solar (NYSE: TSL) is set to step into the earnings spotlight today, with Wall Street expecting a fourth-quarter loss of 4 cents per share. This past year hasn't been kind to TSL as far as earnings are concerned. In two of the three earnings reports thus far, TSL has missed the consensus estimate -- both times by a rather wide margin. There is no doubt that solar firms have lost a bit of their sizzle, what with dropping crude prices and tightening pursestrings. Unfortunately for TSL, it has been caught up in the wave of downside pressure. Even if the firm bucks the recent trend and reports better-than-expected earnings, it may not rally much, thanks to a massive amount of overhead pressure. TSL's 10- and 20-week moving averages are in position to stop any rally attempt, a role that they have filled since the middle of 2008.
That said, there is always the possibility of a major upside earnings surprise, which could lead to a significant gap higher. Of course, there is also the chance that monkeys could fly ... well, you get the picture.
It is amazing that the solar sector has lost so much momentum in such a short amount of time. However, given the dot-com bubble explosion, perhaps we shouldn't be surprised at how fast this sector has cooled off.
Unless there is a major turnaround in both the performance and the sentiment toward solar firms, I would wholeheartedly recommend keeping your cash in your pocket -- even if it is burning a hole in said pocket. Solar is one bandwagon that is losing passengers quickly, at least passengers who have done their research.
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