First Solar, Inc. (FSLR) stock jumped more than 3% on Thursday from the lower end of its price channel. While there was no specific news for the day, the stock was approaching a technical tipping point, and high option trading volume was enough to spur movement. The solar industry could see a turning point on Sept. 22 when the U.S. International Trade Commission (ITC) is set to decide whether Chinese companies are unfairly competing in the United States.
A petition by solar cell manufacturer Suniva to the ITC is aimed at protecting its business and the wider industry from Chinese competitors. The ITC is investigating whether crystalline silicon photovoltaic cells are being imported into the United States in such quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic solar industry. If the petition is successful, new tariffs could bolster domestic producers and hurt Chinese competitors. (See also: Failing U.S. Solar Company Begs Trump for Tariffs.)
From a technical standpoint, the stock rebounded from lower trendline and 50-day moving average support levels at $46.27 toward the middle of its price channel. The relative strength index (RSI) appears neutral at 57.70, while the moving average convergence divergence (MACD) could experience an end to a prolonged downturn dating back to early August. Traders should maintain a bullish bias on the stock given these dynamics.
Traders should watch for a continued move higher toward upper trendline resistance at around $50.00 and R1 resistance at $52.09 on the upside. If the stock loses momentum, traders should watch for a move back down to the 50-day moving average at $46.27 or a breakdown to S1 support levels at $45.08. A crossover of the MACD indicator could indicate the start of a prolonged uptrend over the coming sessions. (For more, see: The History of First Solar.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.