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Two Ways To Play: Cloudy Forecast for Sun Stock

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Strengthen your portfolio in good times and bad.

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More Expected Weakness

Today at 10:00 AM EST, the Institute of Supply Management will release its factory index. According to Bloomberg, economists expect the index to fall this month to 48.5 from 48.6 in April. The drop signals expectations of a decline in manufacturing for a fourth consecutive month. A number below 50 signals a contraction.

Also at 10:00 AM, the Commerce Department will report figures for construction spending. That number is also expected to decline 0.6%, the sixth drop in seven months. For more context on our economy, see Professor Kevin Depew's most recent Five Things You Need To Know.

From the Bull Pen: Bulls continue to like AutoZone (AZO). Sell-stops can be set near $121 (50 DMA).

From the Bear Cave: Lower numbers means continued contraction in the economy. Lower highs in the retail ETF (RTH) also adds to the bear case. Near-term buy-stops can be set above $98 on downside attempts.


First Solar Eye-Opener

Interesting insider trading activity is going on in the solar space. Bloomberg reports First Solar's (FSLR) second-largest shareholder, CEO Michael Ahearn, cut his holdings in half to a little over 3 million shares in May from 6 million at the company's IPO in November 2006. Some believe it may be a sign that shares of the world's largest solar company may soon fizzle. Adding to the negative speculation, the company recently announced that its cells made of toxic cadmium-telluride may be banned in Europe, where the company gets 90% of its revenue. For more, see Professor Charles Payne's A Ray of Sunshine.

From the Bull Pen: Bulls believe in the long-term growth prospects in FSLR and welcome pullbacks towards the $250-230 level.

From the Bear Cave: Those bearish in FSLR can set buy-stops near the $270-280 range depending on one's risk profile. JA Solar (JASO) may be another option; buy-stops above $22.


For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.


Quick Check Around the World

Asian trading closed with the Hang Seng +1.22%, Nikkei +0.71%, Sensex -2.15%, Taiwan +1.22% and Shanghai +0.75%.

A quick check of Europe finds the CAC -1.42%, DAX -1.06%, FTSE -0.87%, ATX -0.28%.


As of 8:00 AM, S&P Futures are lower -6.70 to 1393 and Nasdaq futures are down -7.95 to 2028.


A Look At Commodities

Commodities are lower. Crude oil is down -1.68 to 125.66. Gold is down 0.80 to 890. Silver is down -0.09 to 16.775, and copper is off -6.30 to 356.50.

The dollar index is higher +0.108 to 72.988.


On the Radar

Economics

10:00 Construction Spending –0.6% cons
10:00 ISM Index 48.0 cons

Click here for this week's full trading radar.


Good luck today! Have a great week!
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No positions in stocks mentioned.

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