First Solar (FSLR) shares experienced a significant surge on Wednesday, leading a broader rally for clean energy stocks. This surge was fueled by investor optimism about the sector following the presidential debate between Kamala Harris and Donald Trump. During the debate, Trump mentioned that Harris would “go back to solar” if she becomes president, expressing his support for solar energy. This statement, combined with Harris’ advocacy for clean energy initiatives, has contributed to growing optimism towards solar stocks.
This rally comes at a crucial time for First Solar, as the company has faced challenges in recent months. The stock has been trading mostly sideways for the past 18 months due to elevated interest rates, which have affected demand for solar panels and related products. The increased cost of financing and installing solar panels has hindered the growth of the industry. However, the recent surge in clean energy stocks indicates a potential turnaround for First Solar.
Analyzing First Solar’s chart, we can observe that the stock broke out from a saucer pattern in late May on above-average volume. Although it experienced a retracement of 36%, it found support around the pattern’s neckline. On Wednesday, the stock jumped from this important technical area with high share turnover and closed above the closely-watched 50-day moving average. This indicates strong conviction behind the buying and suggests a bullish trend for First Solar.
Looking ahead, investors should pay attention to three key overhead price levels. The first level to watch is $235, where sellers may seek exit points around a trendline that connects a range of narrow consolidations between early July and late August. A decisive breakout above this level could propel the stock towards the $265 level, where it may encounter resistance near a series of comparable trading levels throughout June. If buying momentum continues, bulls may attempt to reach the stock’s 2024 high around $300. Interestingly, this level aligns with a measured move price target calculated from the saucer pattern’s low to neckline, projecting an upside target of $300.
In the event of a retracement, investors should monitor the $215 level. This area is likely to attract strong support as the stock retests the saucer pattern’s neckline, which has now flipped from resistance to support. This level is crucial for determining the stock’s future direction.
It is important to note that the comments, opinions, and analyses expressed in this article are for informational purposes only. Investors should conduct their own research and analysis before making any investment decisions. As of the date this article was written, the author does not own any of the securities mentioned.
In conclusion, First Solar shares experienced a significant surge amid investor optimism about the clean energy sector. The stock’s breakout from a saucer pattern and its close above the 50-day moving average indicate a bullish trend. Investors should monitor important overhead price levels and key support levels to determine the stock’s future performance.
