Yingli Green Energy bounces higher on solid 3Q earnings

Additionally, CEO Liansheng Miao said that Yingli continued to gain market share during the third quarter. He noted that the quarterly results stemmed from increased demand for Yingli's products "as the solar project financing environment continued to improve," and as the company's cost-cutting efforts began to make an impact on the bottom line.

YGE soared 10.6% in early trading on the back of this solid report, tapping a morning high of $13.30. The equity recently pulled back to support from its 32-week moving average, and it's now in position to challenge familiar resistance in the $14 to $16 area. This region has held YGE in check since early June.

Heading into the report, traders were displaying an overwhelmingly pessimistic mood toward YGE. During the past 10 days, option players on the International Securities Exchange (ISE) bought to open 1.25 puts for every call on the equity. This ratio ranks higher than about 99% of other such readings taken during the past year, indicating that bearish bets have rarely been purchased at a faster pace over their bullish counterparts.

Meanwhile, short interest rose by 6.2% during the past month, and the current accumulation of shorted shares translates to roughly 3.80 days' worth of buying pressure at the security's average daily volume. In other words, YGE could catch a nice lift during the next several sessions if pessimistic traders are sufficiently spooked.

Elizabeth Harrow is a senior equities analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.