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The One Stock That Was Unfazed By The Market Selloff

One of my favorite trade setups is to look for relative strength in individual stocks.

Because if a stock is trading near its recent highs and is outperforming the market, odds are that trend will continue.

2016 has not been a good year for this setup, because nearly every single stock in the market was hit.

When we see global macro risks, correlations run to 1 and everything moves on the great macro conveyor belt.

There is one standout among all the other stocks I follow:

fslr

The stock is First Solar (FSLR). And it has been on an absolute tear over the past few months.

The original catalyst for the stock was back in December when the solar subsidies were extended in the US budget. Since then the stock has been sideways but it did not rollover with the rest of the market.

Just recently they had earnings, and there was a strong reaction to the upside. Odds are we will see post earnings announcement drift come into play.

The weekly chart is very encouraging if you're looking for momentum to come into play.

fslr

 

Over the past few years the stock has found sellers into that $75 level. If those sellers can clear there really isn't much in terms of resistance until $100 per share.

If you're looking for stocks to play if the market manages to keep some upside momentum, this should be at the top of your list.

 

by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/