After the closing bell sounds this afternoon, LDK Solar (NYSE: LDK) will report quarterly earnings. Expectations are pegged at a loss of 91 cents per share for the solar firm, so what can you expect in the wake of the report? Let's take a look at LDK's technical prospects and what an earnings miss or stronger-than-expected earnings could do for the company.
First things first, LDK manufactures and sells solar wafers to other solar manufacturers, both in China (the company's home) and across the globe. The company performed well in the past, when the new global conscience had companies and individuals looking for cleaner forms of energy. Unfortunately, this little thing called a recession occurred, pulling many customers away from LDK and hurting the company on the bottom line.
Solar's fall from the global spotlight is seen on the company's monthly and weekly charts. The equity tagged an all-time high in the upper $76 region in late 2008, but it has been all downhill since then. LDK now faces resistance in the $12 region, a far cry from its past glory. Not only is the $12 region in position to provide resistance, LDK's 10-month moving average has acted as resistance in each of the past two months, and it looks like this trendline could thwart any rally attempts in the wake of stronger-than-expected earnings.
On the other hand, the equity could find a measure of support from its 10- and 20-week moving averages. The stock has cruised along this support during the past month, and these trendlines could help if LDK retreats after today's earnings.
No matter the results, one thing is certain -- the company will have to absolutely shock the investing world by notching a profit in order to get anywhere back to its past glory. It is more than likely that LDK will match or slightly beat expectations and advance a bit tomorrow. The problem for the stock is that (barring a miracle) it will report a loss, which is still a loss (and bad news) in my book.
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