After the early 2012 rally in the Chinese solar sector, with many of them doubling from December lows, we are left to ponder whether the recent substantial declines are merely a steep correction (?) In a steep correction, declines of 50 to 75% are not uncommon. For SOL (as pointed out by tfuture123) "....From 1.45 to 3.38 was A. 3.38 to 2.40 was B (50% fib) 2-Mar-12 12:51 pm........" From the 2.30 interday low, the correction from 3.38 has been 56%. Looking at only closing prices; $2.41 corresponds to 45% (from 3.17). The story is much the same for most of the others in the group; however Trina is way too close to the December low of $6.31 for comfort. At $6.73 Trina had lost 93% of the gains made (from $12.19 id high). Solar bulls need Trina to hold up here. Even if this turns out to be a "steep correction", I wouldn't be surprised to see a false rally here; followed by a (successful) retest of recent lows. Disclosure: long SOL, TSL, and GTAT
this is not a "correction". it is the realization by the market that i) solar companies will continue to incur losses throughout 2012 and into 2013, and ii) some of the companies will not survive. too many players have entered this business and because of the speed of tech-development mergers/acquisitions won't happen (who would want to buy old technology or inefficient production machinery). hence, there is no bottom in this sector. would you have been able to pick AAPL as a winner in 1992? I wouldn't - and that's what most solar investors are being faced with right now.
Your views are dead on, and they accurately sum up the dismal fundamental picture. My comments were more about the tecnical action of the stocks. In the best case; the group moves up from here in anticipation of a turn around in 2013. There IS demand for their products; just too much supply at this time.