Solar Stock Signaling Strong Summer Ahead

SunPower stock has won nine straight

by Patrick Martin

Published on Jul 10, 2019 at 3:00 PM

When we last checked in with SunPower Corporation (NASDAQ:SPWR), the solar stock was fresh off its best day since 2013. Now, three weeks later, SPWR is flashing another signal that indicates its recent surge could be far from over. 

Yesterday, SunPower stock nabbed a three-year high of $12.79, and has more than doubled in 2019 alone. Even pullbacks in late June found support at the shares' rising 10-day moving average.

Daily Stock Chart SPWR

Meanwhile, implied volatilities on the equity are at historically low levels, per SPWR's Schaeffer's Volatility Index (SVI) of 52%, which registers in the 18th percentile of its annual range. According to Schaeffer's Senior Quantitative Analyst Rocky White, the other time in the past five years the equity has been trading near a 52-week high while its SVI ranked in the 20th annual percentile or lower, resulted in an one-month gain of 48.38%.

Plus, SunPower stock is one of the 20 stocks that has outperformed the S&P 500 Index by at least seven straight days, as of yesterday's close. According to White, SPWR is tied for fifth on that list of outperformers, although its pullback today to $12 will end its winning streak at nine.
 
But an unwinding of pessimism could help start a new hot streak. Short interest fell by 5.2% in the two most recent reporting periods to 18.31 million shares, yet still accounts for almost 30% of the security's total available float.
 
Upgrades could also vault SPWR higher, and the door is wide open. Of the eight brokerages covering the equity, seven rate it a "hold" or worse, while its consensus 12-month price-target of $7.41 is a 39% discount to its current perch. 
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