$TAN – Solar stocks ready to rise and shine again

About a month ago I wrote in this blog:

Always a good sector to buy with any market rally, solar may be the best chance to rack up a 50% gain in the next couple of months.  Longer-term, no matter how volatile, it is a growth sector and preferable in the future to investing in fossil fuel stocks of any kind, particularly better than coal.

There will likely be a couple of more dips (which is worth noting) before this rise gets really going but historically it will, like the sun itself, rise again.

It appears the “couple of more dips” noted above may be done and it is time for the solar ETF to really get going.  Since I wrote that, CNN Money’s Fear and Greed Index as been reading fear but working its way higher, and TAN has now dropped to a level that may produce a double bottom for this swing (see the first chart below).

I say “may produce a double bottom” because it still has to turn up but it appears in pre-market action today that today is likely THE DAY.

This is a sector that has been sold off heavily on the CNN index’s swing from greed to fear. Consequently, the stocks in the sector like CSIQ, FSLR (which is showing strength premarket and is often a leader),  SUNE, JKS, SPWR, are deeply oversold (see the second chart below).

The oversold conditions make the stock buys all bottom picks.  This a play for a bounce initially (always with tight stops) that may very well turn into the 50% rally mentioned above.

(Click on the chart for a larger image)

TAN_2015-08-05_0526

(Click on the chart for a larger image)

SOLARS_2015-08-05_0543

Breathe easier — coal’s dead-end road…

Finally President Obama has come right out and said it — coal has got to go.

For all of its history, at best a necessary evil, the coal industry was been poisoning the planet, killing mountains and streams, enslaving whole regions of people in West Virginia, Kentucky, Ohio, Pennsylvania and now in the Powder River Basin in Wyoming and Montana, and with  a wanton disregard for mine safety and health, even killing its own employees.

Even now in the waning years of coal-powered electrical generation, the financial calculations of the damage to public health by the industry exceed the market cap of many of the coal companies themselves.

With the advancement of renewable clean energy technologies in wind and solar and thermal (and probably in the end in safer nuclear), it is time for clean renewable energy to take over the future.

The President’s announced plan, as the New York Times has just now editorialized with President Obama’s Tough, Achievable Climate Plan, continues the trend that has been going on now for some time as fracking for cleaner natural gas, as well as environmental regulations, have taken a devastating toll on the coal companies stocks. It is getting to the point now that the industry’s constant blat that coal is cheaper (even if it kills you) is not going to play anymore against the better cleaner sources of energy.

These last couple of years, companies like Peabody Energy (BTU) and Cloud Peak Energy (CLD) have made a desperate attempt to advance coal exports to China and India by proposing to build shipping terminals on the West Coast but they have been met by a solid wall of environmentalist saying no way and those efforts seem doomed (although the companies are still burning maybe the last of their cash to try to overcome their fierce opposition). And on a visit to China not so long ago, President Obama reached an agreement with the Chinese to curb coal imports there.

It’s getting so coal finally has no where to turn.

And the stocks show it (see the panel below). These stocks not only have little to no chance for investment growth, they are in fact risks to all shareholder equity as more and more of them, like Patriot Coal and James River Coal and Walter Energy, go bankrupt.

The time has come it appears to wave goodbye to the coal boys and breathe easier all over the world.

(Click on chart for a larger image)

coal_2015-08-03_1910

$SOXL – Ready, set for profits again as the market shifts from fear to greed

CNN Money’s “Fear and Greed” Index oscillates from fear to greed and back again, and most market sectors fluctuate with its shift in sentiment. Today its inevitable shift appears to have begun as the CNN exited the fear zone.

As a result I’ve been looking for an oversold sector that has been known historically to run up hard and fast when the time comes.

In this example, it’s the semiconductor stocks and SOXL, the 3xLeveraged ETF for the sector.  The last time the market shifted from a state of fear to one of greed (see chart below), SOXL rallied from about $29 to as much as $40 a share, approximately a 37 percent advance in less than twenty days.

This what “swing trading” is all about.

Among the top holdings in the ETF are TXN, QCOM, INTC, and BRCM, but more vibrant semis include AMBA, NPTN, SWKS, FSL and AVGO,  and I suppose Apple-supplier NXPI if AAPL mounts rally with the market. Semiconductors (and there are a lot of them) tend to be all over the place so a diversified basket may be best — SMH, for an ETF without leverage, and SOXL for one with leverage.

Not recommending anyone do anything without one’s own due diligence, but as far as I’m concerned, this is a beaten-down sector with a lot of beaten-down stocks (I’m bottom-picking here) and it is likely going to be a sector worth trying to ride on the next rally.

(Click on chart for a larger image)

Soxl_2015-08-05_1430

$AAPL – Will the “Next Big Thing” be a huge stock stumble?

First the good news.  AAPL will make scads of money no matter what.

Now the bad news.  The company, built on innovation and disruptive technology under Steve Jobs, has become a me-too company while slowly slipping on the tech fronts it once totally dominated.

When once the company revolutionized the computer market with high-end desktop computing and tablet computing, and completely transformed the music industry with the iPod and ITunes, and the personal phone world with the IPhone (it’s been calculated that people now spend and average of 46 minutes a day just checking their smartphones), the company appears now to have no more worlds to conquer, or at least worlds IT can conquer.

The “Me-Toos” include the iPhone sometimes chasing Samsung Android instead of the other way around, an Apple watch that makes so sense at all against the wristwatches of older generations and smartphones of the younger generation (what, are millennials too lazy to check the phone time and email? hardly); a TV service that is sort of Netflix-Amazon and sort of Roku-Google-Chrome and as such Apple is entering one of the most competitive business arenas in which they are already far behind; and now there is talk Apple might build an electric car to complete with Tesla (huh?) to say nothing of Toyota, GM, Mercedes, BMW and the rest of the auto world.

More bad news.  Check out this link from The Street: 7 Incredible Apple Patents Than May Hint At The Next Big Thing. That headline may sound like good news but not so.  Despite the hyperbole the “7 Incredibles” include a personal remote control, a virtual reality headset (to compete with Oculus — more “me too”),  an “IPen” (it writes), a flexible phone (thought they already manufactured that…by accident), and a couple other noodles.

This is obviously not Steve Jobs’ Apple anymore.

So what about the stock?

First off, AAPL stock has generated an unprecedented market cap of more than $700 billion when the previous record was just over $600 billion (MSFT), and only four other companies in history have exceeded $500 billion market caps (CSCO, GE, INTC, XOM) and Apple spent more than $100 billion of the company’s massive cash trove to get there. They likely will have spend more to stay so high (which, granted, they certainly can do since they have more than $200 billion in reserve and the means to make more).

But more importantly, time and history is not on the stock’s side (all of those companies that flew over a $500 billion market cap with the exception of XOM have had their stock cut in half or more eventually, and XOM has lost more than 20 percent).  That time too will come eventually to AAPL’s stock also — when a company’s stock is priced to perfection and over-owned by everyone the “next big thing” is an inevitable tumble.

So let’s consider the chart of AAPL below.  The good news — it is at the bottom and a long-time range and it can move back up within that range (MSFT went sideways for 12 years after its fall), and AAPL with all of its cash might hold high ground going sideways.  The bad news, the stock drops below 119-120 and all hell breaks loose when everyone who bought it basically this year realizes they are losing money.

The time for the tumble could be right now.

That’s it, one way or the other.

(Click on the chart for a larger image)

AAPL_2015-08-03_0953