February Fun With LDK Solar

We’re revisiting an old favorite today, LDK Solar Co. Ltd (NYSE:LDK).  This is a Chinese Green Energy play that we like to throw on occasionally.  As much as we love green energy it isn’t something you can put your money into and forget it.  Last month the solar sector was among the bottom on Tickerspy.  This is one area where you need entry and exit strategies.

We’re seeing some positive technical signs:

  • Higher highs and higher lows have been happening for four days.
  • Person’s Proprietary System (PPS) is showing a buy
  • PPS shows a positive cross over after the buy signal
  • MACD Histogram progresses back to and above zero
  • Stochastics have crossed over into positive and have not gone negative
  • Stock did not break down below pivot point of $6.93

Our short term strategy was to do a covered call.  In simple terms you buy some stock and then sell a contract to sell the stock to someone else at a later date.  We managed to get in at $6.94 per share and sold a March 7.5 CALL for $.40.  We get paid $.40 per share for agreeing to sell the stock to someone else if it reaches $7.50 by March 19.  If the stock keeps going up we miss out because we will have to sell it at $7.50.

There’s a 63% chance that it will not get to $7.50 so we can put on another covered call next month if things go our way.

If it stays under $7.50 we get to keep the $.40 which reduces our risk to $6.54 per share.  We won’t lose any money unless the stock drops below $6.54.  There appears to be some resistance around $7.12, but if that breaks it should be a relatively smooth ride up to $7.50.  We have a Sell Stop in place at 6.74 which still nets us $.20 per share if the trade moves against us.

Without the covered call this trade might not be worth the risk.  Using covered calls can be a good strategy to reduce your risk if you know that you want out of a stock by a certain date or price.

Extending Protective Orders to Pets

Georgia is poised to make progress in the area of family law and animal rights.  GA HB 429 adds pets to those protected by Georgia’s family violence act.  OCGA 19-13-4 allows the court to grant protective orders to bring about cessation of acts of family violence.  HB 429 comes to us courtesy of Rep. Sharon Cooper (R-Marietta).

“If you think about it in a domestic violence way, people are so attached to their pets now,” said state Rep. Sharon Cooper (R-Marietta), who sponsored HB 429. “One way to really hurt the person you’re trying to control is to go after the pet.”

In issuing a protective order, courts can order a person to refrain from domestic violence, authorize a dangerous person to be evicted from a home or force them to provide housing elsewhere for a partner, and set up child and spousal support payments. Cooper’s bill would allow pets to be included.

This language has been added to the OCGA 19-13-4

(12) Order the respondent to refrain from harming any family pet and further direct the care, custody, or control of any family pet. As used in this paragraph, the term ‘family pet’ means an animal kept for companionship and enjoyment or a household animal which is owned or possessed by either party, or a minor child residing in the household of either party, and shall not include livestock, laboratory animals, working animals, or sport animals which are kept for economic purposes.”

The bill allows judges to order an alleged abuser to not harm family pets.  A judge can also assign care and custody of the pet as well.  If Georgia passes HB 429 it will become the twelfth state to have a law that protects pets.  Rep. Cooper deserves a lot of credit for sponsoring this bill.  It’s something that Georgia has been missing and desperately needs.

State residents need to visit http://www.legis.state.ga.us/legis/FindLegislator.htm to look up their legislator and have them support the bill.  The Senate needs to be the focus of action since the legislation expired last year with no apparent interest in passing it.

Green Stocks Set To Recover

Over the past few days Green Energy has taken a beating on the market.  There are some signs of a turnaround though it is not certain.  Using the PPS, MACD Histogram, and Slow Stochastic it appears a few stocks have started to turn around.

YGE Day Chart
YGE Day Chart

Yingli Green Energy is showing a positive crossover on the Stochastic,  the MACD is improving day after day,  and the PPS is also having a positive crossover.

OPTT Day Chart
OPTT Day Chart

Ocean Power Technologies is showing a positive crossover on the Stochastic,  the MACD is improving day after day,  and the PPS is leaning towards a positive crossover.

FSLR Day Chart
FSLR Day Chart

First Solar is is showing a positive crossover on the Stochastic. The MACD is improving day after day.  The PPS is also having a positive crossover and is signaling a buy indicator.

AONE Day Chart
AONE Day Chart

Battery Maker A123 Systems is showing a positive crossover on the Stochastic.  The MACD is improving day after day after a flat decline.  The PPS is almost having a positive crossover and the buy indicator has triggered.