First Solar Loses Power After Analyst Upgrade: What the Stock Chart Says

In a bull market or at least on a day when the market has upside potential, an issue update can trigger an oversized upside.

In a bear market, even a problem upgrade in a strong sector may not have the same effect. This certainly applies to First Solar Inc. FSLR, which is Thursday's pre-market readiness stock of the day.

Rangebound: Despite the S&P 500 index swinging wildly over the past few weeks, First Solar was within a $13 trading range from $127.07 to $140 $.64.

The high of the range marks more than an 11-year high on the show, when it peaked in June 2011 at $142.22. Even this price is 50% below half of its all-time high, reached in May 2008 at $317.

The low of the trading range was hit last Friday at $127.07 and was rocked by a low the following day at $127.60.

The highest close of the recent rally was achieved on September 19 at $137.04.

First Solar Upgrade: Ahead of the open, Evercore ISI Group analyst Sean Morgan upgraded First Solar from In-Line to Outperform and raised the price target from $88 to $150.

This comes just above Morgan Stanley's price target for the issue of $136.

PreMarket Prep's view: As the issue was discussed on the show Thursday, it was trading almost a dollar higher in the lower handle of $137.< /p>

Co-host Dennis Dick was in no mood to tone down this update.

"The relative strength of solar stocks has been incredible and I'm not tempted to short it, even at a multi-year high," he said.

The author of this article alerted investors to the fact that the move's recent closing high was reached on September 19 at $137.04.

Furthermore, the importance of staying above the open print, wherever it is, was emphasized as traders could trigger downward action on prices in case of overrun.

FSLR Price Action: After opening slightly higher, the issue broke past the move's recent closing high, rallying to $138.19 and reversing price sharply.< /p>

Not only did the issue slice the opening price, it went way beyond that. First Solar finally lost 3.86% on Thursday, closing at $130.93.

Discussion of the issue from Thursday's show can be found here:[embedded content]

Photo via Shutterstock.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.