Sunny Days Ahead for JinkoSolar, Says Signal

Year-over-year, the security is already up over 168.9%

Assistant Editor
Jan 14, 2021 at 3:12 PM
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The shares of solar power company JinkoSolar Holding Co., Ltd (NYSE:JKS) are down 1% at $62.38 this afternoon, though year-over-year the equity still boasts a substantial 168.9% lead. And while the equity just sunk back below its 60-day moving average, a historically bullish trendline a bit lower on the charts could propel JKS to fresh annual highs.

Specifically, JinkoSolar stock just pulled back to its 80-day moving average, after an extended stretch above this key trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar signals have occurred in the past three years. After three of these pullbacks, JinkoSolar stock enjoyed positive returns one month later, averaging a fantastic gain of 39.52%. A similar move from its current perch would put the stock at $87.03, just within striking distance of its Oct. 20 all-time closing high of $87.55.

JKS Chart January 14

What's more, White's study shows that an at-the-money JKS call option could potentially return 363% in the next 21 days. In other words, prospective call buyers could quadruple their money on an expected 39.52% rise in shares. 

Digging deeper, shorts are already hitting the exits at an alarming rate. Short interest fell 22.5% in the most recent reporting period, though the 6.19 million shares sold short make up a healthy 14.1% of the stock's available float. Should this pessimism continue to unwind, it could put even more wind at the equity's back. 

The options pits are showing a penchant for bullish bets, with calls popular. This is per JKS's 50-day call/put volume ratio of 3.53 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 86% of readings from the past year. This means calls are being picked up at a much quicker-than-usual clip. 

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