First Solar appears headed for a showdown. Here we can see that the large gap up in the price of FSLR in early May did not result in a new trendline, nor did it reverse. Instead, it set up the start of a formation often called a descending triangle. In this chart pattern, a stock oscillates between a lower support price and a higher price, but with the higher prices gradually becoming lower. A horizontal yellow line shows the support zone for FSLR, and an angled yellow line shows the falling top prices. In this situation, each advance in price is met with selling, each time at a lower price. The apex of the formation implies a decision to be made - either up or down. Generally, the support zone is the price to be broken for this pattern. FSLR also has a substantial unfilled gap in the 160-175 region. Unfilled gaps "pull" prices, in this case, they are pulled down.
So, the technical signs say that FSLR will fall in price in the next few days. They say that FSLR will move back to the 140-155 zone. These signs can be overridden by the market in general, or by a change in fundamentals, and technicals often cannot be relied on, but the situation looks pretty shaky for FSLR in my eyes. There is no way I would be long the stock right here. Are you long FSLR? Beware!
