Canadian Solar Inc., SunPower Corporation Hit By Sector Headwinds

Canadian Solar Inc. (CSIQ) and SunPower Corporation (SPWR) are among the alternative energy stocks taking it on the chin

Dec 10, 2015 at 10:56 AM
facebook X logo linkedin


Just a day after catching fire, solar stocks are struggling on disappointing guidance from First Solar, Inc. (NASDAQ:FSLR). In particular, two names feeling the heat are Canadian Solar Inc. (NASDAQ:CSIQ) and SunPower Corporation (NASDAQ:SPWR).

CSIQ was down more than 2% earlier, but has since pared its loss to 0.3% to sit at $23.56. However, this is an unusual showing for a stock that's surged over 39% since the start of October. Even today's losses are being contained by the solar issue's 32-day moving average.

The technical outperformer has won support on Wall Street. Across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CSIQ has racked up a 50-day call/put volume ratio of 3.19 -- higher than four-fifths of the readings taken in the past year. If that's not enough, 100% of covering analysts consider the stock a "strong buy."

That's not to say skepticism is totally absent. In fact, 15.2% of Canadian Solar Inc.'s float is sold short. In fact, some of the recent call buying -- particularly at out-of-the-money strikes -- could indicate hedging by the shorts. If the shares can resume their longer-term uptrend, a short-squeeze situation could materialize, sending them even higher.

Turning to SPWR, the stock is off an even sharper 2.7% at $22.42. Since December started, the shares have retreated over 6%, and are on track for their lowest close since mid-November.

Suffice it to say, option bulls may be starting to get rattled. SPWR's 10-day ISE/CBOE/PHLX call/put volume ratio checks in at 4.89, with nearly five calls bought to open for each put. What's more, this ratio sits 7 percentage points from a 12-month high, indicating a stronger-than-usual preference for bullish bets over bearish.

Again, though, some of the recent affinity for long calls could be attributable to shorts looking for protection. Short interest on SPWR grew 15.6% during the past two reporting periods, and now accounts for 12.3% of the stock's total available float.

Likewise, optimism among the brokerage crowd could soon start to wane. Of the 13 analysts following SunPower Corporation, 10 have handed out a "buy" or better rating, compared to three "holds" and not a single "sell." From a contrarian perspective, this underperforming stock looks vulnerable to additional losses going forward as the positivity starts to sour.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI