Any one who trades or invests knows, 'they don't all work out." First Solar (NASDAQ: FSLR) is one that didn't work out, as the stock tripped the Sell/Stop Loss at $115, after a $184.50 Buy recommendation issued on June 2, 2009. The ride down below $115 closed out a wild summer for FSLR, which saw shares lose 50% of their value, basically. Simply, First Solar is a volatile stock that's only suitable for high-risk investors who can tolerate repeated 20-30% stock swings.
Further, FSLR's proprietary, thin film, semiconductor solar module technology remains promising, but there are still too many unknowns regarding technology deployment and the competing landscape. At minimum, the business model needs about 9-12 months to ferment, combined with clarification regarding the price direction of competing energy forms, particularly natural gas and oil. Some policy visibility regarding how much policy makers plan to increase emission taxes on coal would also help clarify FSLR's prospects.
Those unknowns, combined with a hedge fund tendency to toss this stock around - $30 gap-ups can reverse in three weeks – put the stock in the Don't Buy category.
In sum, at this juncture, at least 2-4 more quarters of data points must be amassed on First Solar before one can expect to see any sense of logic, pattern, or normalcy to FSLR's stock chart.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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