First Solar to join the S&P 500 Index

Posted Oct 2nd 2009 10:30AM by Mark Fightmaster
Filed under: Pfizer (PFE), Indices, S and P 500

Late Thursday, Standard & Poor's announced a few changes to its U.S. indices. The reason for the changes are that Wyeth (NYSE: WYE) is being acquired by Pfizer (NYSE: PFE), leaving an opening in both the S&P 100 and S&P 500 (SPX). I want to focus on the stock that will replace WYE in the SPX, First Solar (NASDAQ: FSLR). In after-hours trading, FSLR jumped more than 6% in response to the announcement.

FSLR manufactures solar modules and is a major benefactor of what I like to call the "green rush" that took place during the past two years. FSLR capitalized nicely on the global environmental consciousness revolution last year, ascending as high as the $310 region. Yes, the stock has backed off quite a bit due to the economic crisis, but it could enjoy a bit of a recovery provided it can parlay this latest news into a breach of some overhead resistance.

The stock faces resistance in the form of its 50-week moving average, a nascent role that could be easily bested. I am a bit more concerned about the resistance provided by FSLR's 10- and 20-month moving averages. These trendlines have acted as support in the past, and could now relish their roles as resistance. Let's see what happens in the wake of the SPX announcement, a clear break of these various layers of resistance could signal a run higher from the solar stock.

Tags: first solar, FirstSolar, FSLR, inthenews, pfe, standard and poors, standard poors, StandardAndPoors, StandardPoors, wye, wyeth