Don’t Let the Sun Go Down on Me

Solar stocks took quite a beating in 2011-12 that includes Sunpower, SPWR, which lost more than 80%, bottoming below $4/share. What a buy that level turned out to be for those that had the intestinal fortitude and bottom picking skills as it rose more than 1000% (trough to peak) topping in June 2014. You can see during the topping process negative divergence was created warning of weakness and of a likely correction.

The blue horizontal line at ~$18 acted as support many times prior to the week of May 9th as it finally gave way turning to resistance. After support broke, price attempted to rally back to $18 but the backtest failed and immediately turned lower.

bay areas best investment advisor and retirement planning expert - spwr - 6-20-16

One has to have an imagination and be slightly cross-eyed to see it but that topping pattern could be an extended, complex head and shoulders pattern. If so and it comes to fruition, the future does not look bright for Sunpower stock. The two downside targets are the $4-5 range and GULP! $0. Regardless of whether the pattern confirms or not, the series of lower highs and lower lows combined with a falling 200 day moving average should give warning to anyone holding this stock that they may want to reconsider.  For those who are successful short traders this provides an excellent opportunity for a big payday.