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Trina Solar update 27/5

May 27th, 2008 · No Comments

Well, we’re almost there, that 200 day moving average again..  Here is the chart:

It needs to hold. 

We still not have a date for earnings release, the earnings release out of other solar stocks (STP, Canadian Solar, SOLF) was good to very good, demand still seems to be growing at a very brisk pace.

We do not have worries about this particular company. However, having said that, we do have three specific worries:

  • The solar sector has recovered pretty fast from it’s February lows, a breether or pullback seems to be going on.
  • We’ve said many times before, we don’t trust the market, and when the market goes, this sector will go with it, and it might even go down a lot faster than the general market, as it is (wrongly, in our view) perceived as a risky sector.
  • Oil prices could come down, although until now there seems to be only a spurious relation between the solars and oil on the markets, a real relation does exist (as they’re part substitutes), so we cannot rule out oil taking the solars lower.

It’s a real pity. Trina is very cheap. It should be significantly higher, in fact, it could be twice the price and still not be terribly expensive, trading at roughly 12 times this years earnings. Alas…

What to do? You could pick a few up in the low 45s, but set a stop loss at 44 or so, because braking it’s support would not be good.

Tags: TSL