First Solar, Inc. (NASDAQ: FSLR) seems to be poised for a price surge as per its latest charts. First Solar, Inc. is an American manufacturer of solar panels, and a provider of utility-scale PV power plants and supporting services that include finance, construction, maintenance, and end-of-life panel recycling.
Bullish Indications
#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock has been trading within a downtrend channel for the past few months. This is marked in the daily chart in orange color. Currently, the stock has broken out of the downtrend channel and is moving higher. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
FSLR – Daily Chart
#2 Price above MA: The price is currently above the short-term moving average of 50-day SMA, indicating that the bulls have gained control. This is a positive indication.
#3 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#4 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has started to move up from below –DI and +DI lines. This indicates possible bullishness.
#5 Fibonacci Support: Usually, after an up-move, stocks typically retrace to any of the key Fibonacci levels before surging back again. The stock had taken support at the 38.2% Fibonacci support level before moving higher, as seen in the weekly chart. This indicates bullishness.
FSLR – Weekly Chart
#6 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart, and has also moved higher from oversold levels. This is a possible bullish indication.
#7 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart as well, indicating bullishness.
#8 Bullish RSI: In the weekly chart, the RSI is currently above 50 and moving higher. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of FSLR above the price of around $86.
TP: Our target prices are $95 and $102 in the next 3-6 months.
SL: To limit risk, place stop-loss at $81. Note that the stop-loss is on a closing basis.
Our target potential upside is 11% to 19% in the next 3 to 6 months.
For a risk of $5.00, our target rewards are $9.00 and $16.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the trend channel with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
— Tara
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