Built by Traders, for Traders

This Top Solar Stock Is Set for Megawatt Gains

This week, we are powering up your portfolio with a top stock in the solar power equipment and services market. This top stock is the leading US-based solar company that gets plenty of US Federal, state and local support and incentives as well as tariff protections against foreign competition.

The stock has gained by 9.74% so far this year – but here at Top 5, we are eyeing a great opportunity to enter the trade to buy this top solar stock for a quick gain that could range from 5 to more than 7% in very short order.

This would continue our successes in our stock trades inside Top 5 with the average return on our hit stock trades at 7.58% for a total gain for hit trades running at 547.97%. 

And for the stock option alternatives presented for many of the stocks, the average gain for hit trades is running at 41.99%.

So, for weekly hit stock trades and stock option alternatives, these returns add up and can compound to amount to four-figure returns over the year. 

Sun Up, Power Up

The US is a power-hungry nation and economy. And as we’ve all seen and experienced first hand, traditional power generating fuels from coal to natural gas and even crude oil are all soaring in price with rising demand and limited supplies that can’t keep up.

But one of the alternative sources for electric power is solar. Solar power comes primarily in two basic forms. First is solar voltaics (PV) that utilizes the sun to generate power through cells in array panels. And second is concentration solar-thermal power (CSP) that utilizes heat from the sun to provide the mechanism to generate power.

But regardless of which basic form of solar energy, the US is still utilizing a smaller amount of solar power for its overall electric power needs.

The US Department of Energy (DOE) reports that solar power installations are estimated to produce 97.2 gigawatts (GW) of power in the US. This amounts to the amount of total power that is consumed by 18 million average homes. 

This may seem like a lot, but it’s still in its infancy as it only represents 3% of total US energy production.

Now, that said, the current administration is focused on aiding and supporting the further development of solar power generation in the US. 

And with the COP26 (Council of the Parties) meeting in Glasgow, Scotland just recently concluded, discussions of global warming and alternative energy were front and center including from the US delegation in attendance.

To further this, there are many Federal as well as state tax, local tax and other incentives to promote the adoption and installation of solar power equipment in the US. And there are also various trade restrictions and disincentives to purchase solar power equipment from non-US producers.

This means that if you are an US-based solar power equipment company, you are in the driver’s seat right now with major government support for your efforts to sell more stuff to make power from the sun.

Shining Top Stock Opportunity

Inside Top 5, we have been researching the opportunities for solar power in the US and have identified the top stock that is the prime play now for a nice upside target level to be hit in shorter order.

The stock is First Solar (FSLR) a Tempe, Arizona-based equipment company that is one of the primary go-to solar companies for the domestic US market.

This company is a prime beneficiary of tax and policy incentives for US-based solar equipment. And it operates quite efficiently with a gross profit margin running at 25.12% on its overall revenue for the most recent quarter of $584 million.

First Solar Stock Price
First Solar Stock Price — Source: Dow Jones

Here is our latest analysis for the stock trade and how it sets up for this week.

First Solar Price & Technical Analysis
First Solar Price & Technical Analysis — Source: Traders Agency & Trading View

The trade to make for First Solar is to buy the shares as they break into the buy zone above the counter trendline that would equate to a level around $111.00 and in turn, hold them for our target price level of $116.92%.

From the current price of around $108.69, it represents a potential cash gain on the shares of 7.57% for a short-term trade. 

But if you wait for the trade to break the counter trendline at an equated level of $111.00 and hold it to the target price would equate to a gain of 5.33%.

And for the latest from Top 5, please click here for our latest session.

Keep on Trading,

Josh Martinez

Editor, Top 5

TRADING TO THE NEXT LEVEL

Your market analysis is about to get a whole lot simpler.

Subscribe to Beyond the Trade – a free newsletter including Josh’s Weekly Trade Ideas and more!

Upcoming Webinars