First Solar (FSLR) shares skyrocketed on Wednesday, driving a broader rally in clean energy stocks after the presidential debate between Kamala Harris and Donald Trump. Despite Trump’s comment that Harris would “go back to solar” if she wins, and his self-professed admiration for solar energy, Harris did not directly address the topic. However, her support for the Biden Administration’s Inflation Reduction Act, which promotes clean energy initiatives, including tax credits for solar installations, has renewed investor optimism in the sector.
Stagnant Growth Revitalized by Clean Energy Policies
This optimism is a boon for First Solar, which has been relatively stagnant over the last 18 months due to high interest rates. These rates have made it more costly to finance solar projects, hampering demand. But with growing support for clean energy policies, investors are increasingly bullish on solar stocks.
Technical Analysis: Key Price Levels for First Solar
First Solar’s stock broke out from a saucer pattern in late May, with strong trading volume, only to peak in mid-June. The stock retraced as much as 36% but found solid support around the neckline of the pattern. This area proved to be a key technical support, with Wednesday’s jump occurring on the highest trading volume since June, pushing the price above the 50-day moving average. The stock closed up 15% at $239.84, signaling strong buying momentum.
Overhead Price Levels to Watch
Looking ahead, investors should focus on three key price levels:
$235: Although the stock closed just above this level, there may still be selling pressure from investors looking to exit around a trendline formed during a period of consolidation from July to August. A decisive breakout above this trendline could push the stock higher.
$265: This is the next potential resistance level, where the stock encountered resistance multiple times in June. A breakthrough could lead to further gains.
$300: If bullish momentum continues, the stock could revisit its 2024 high near $300. This target aligns with the measured move derived from the saucer pattern, adding $85 (the distance from the saucer’s low to its neckline) to the breakout point at $215.
Retracement Levels to Monitor
In case of a pullback, investors should monitor the $215 level, which previously served as resistance but has now flipped to a key support level. A retest of this neckline could attract renewed buying interest if the stock retreats.
Conclusion
First Solar’s surge on Wednesday marks an encouraging sign for clean energy investors, bolstered by renewed optimism and technical momentum. Investors will want to keep a close eye on these price levels to assess potential future moves in the stock.
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