First Solar, Inc.
First Solar, Inc. (FSLR) was slapped with a downgrade this morning, as brokerage firm Credit Suisse adjusted its ratings on a slew of solar stocks. FSLR was cut to "neutral" from "outperform," as Credit Suisse lowered its recommendation on the broader solar sector to "market weight." In a note to clients, the firm explained that it expects supply growth to overwhelm demand trends.
FSLR is down just 0.8% in electronic trading, but the stock is currently in danger of notching a weekly finish below its 10-week and 20-week moving averages. The shares haven't suffered a Friday close south of this supportive trendline duo since mid-June.
Traders seem eager to capitalize on FSLR's technical breakdown, as puts have become the options of choice in recent weeks. During the past 10 days, options players on the International Securities Exchange (ISE) have bought to open 1.69 puts for every call on the alternative energy issue.
Potash Corp. of Saskatchewan
Potash Corp. of Saskatchewan (POT) announced last night that its board of directors has approved a $2 billion stock buyback. The fertilizer firm hopes to complete the share repurchase by the end of this year, depending on market conditions. Based on POT's current share price, Reuters estimates the company could buy back as many as 14.5 million shares, or 5% of its outstanding float. The news has earned POT a price-target boost this morning, with Barclays boosting its forecast to $160 from $130 and backing its "overweight" rating.
POT has added 1.1% ahead of the bell, with the stock attempting to snap back from a recent slump. The shares sagged earlier this week after BHP Billiton (BHP) officially abandoned its unsolicited buyout bid, but the stock remains perched above rising support at its 20-week moving average.
In light of POT's recent technical woes, traders have taken a shine toward bearishly oriented options. The equity's 10-day ISE put/call volume ratio of 0.94 rests in the 80th annual percentile, as traders have purchased puts over calls at a faster clip just 20% of the time during the past year.
Mid-Caps Nearing a Triple of March 2009 Lows
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