First Solar Stock Being Promoted to the S&P 500

First Solar (FSLR) will join the S&P 500 index before the opening bell on December 19. Fortune Brands Home & Security (FBHS) will be removed and move to the S&P400.

Stocks added to any index such as the S&P 500 or the DJIA,  generally rise for awhile as all index funds, based on that index, must buy them to fulfill their obligation.

First Solar Bounce on SPX Addition

First Solar (FSLR) stock rose 1.92% on Wednesday, with most solar and alternative energy related names rising as well. Shares rallied nearly 7% since Monday, the third straight increase in shares.

First Solar operating earnings are growing at 49%, as operating cash flow improves in the current quarter. Net income generated is also greater than operating cash flow to date. That said, the company is trading at a premium to free cash flow (FCF) with FCF growth pegging +51%. EBITDA growth is 24.26%.

Keep in mind debt is increasing as the company grows. Debt to equity measures have been rising at the same time.

First Solar Weekly – 2nd Stage Base

First Solar’s stock has stayed above its bullish 10-week moving average for over 22 weeks, since reversing its downtrend in mid-July.

Last week was the first test of the 10-week line since FSLR stock blasted out of a 6-month first stage base.

A strong rebound from 21d ema has proven to be a short term buying opportunity for FSLR stock as mutual funds and index tracking ETFs add its shares to their rosters.

Click to enlarge charts.

Number one ranked Array Technologies (ARRY) and IBD50 stock is trying to break out of its 22-week cup and handle base. Array stock is also appearing on the MarketSmith Blue Dot scan as of Wednesday close.

Number 4 ranked SolarEdge Technologies (SEDG) broke out of it’s cup and handle base on Tuesday, gaining another 2.43% on Wednesday. SunPower (SPWR) gained 2.04% closing at 23.53.

Canadian Solar (CSIQ) gained 3.41%, while SunRun (RUN) surged 3.87% on above average volume for a second day.

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Happy Trading, 

Vinny

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