JA Solar (JASO) and LDK

View From the Turret: Crossroads Trading -- Seeking Alpha

Solar Strength
A number of key solar names were sharply higher last week as traders reacted to a few compelling themes:

1. LDK’s $8.9 billion dollar funding from China Development Bank has the industry hopeful that additional funding and liquidity will be available in the quarters to come.
2. A sustained rally in the euro makes exports from Chinese manufacturing companies to European buyers more attractive.

Many of the stocks are extended significantly beyond an appropriate buy point, but a pullback in the next few days could offer an attractive entry point.
JA Solar Holdings (JASO) is one of the many solar companies that is seeing a rebound in both revenue and earnings, and analysts have been increasing their expectations for the next two years.
With a stable balance sheet and a PE multiple that is still in the single digits, JASO could continue to rally for some time to come. I’m not interested in chasing the stock at these levels, but a pullback to near $7.50 or $8.00 along with a period of consolidation would have me much more interested in picking up a small position and then adding more exposure as the trend reasserts itself.