YGE Yingli Green Energy Solar Power and China Power ?

Well Thanksgiving is over, the world is still turning and China is an economic powerhouse that needs lots of energy and food to keep its people and growing economy happy.  Can you imagine how many turkey’s they would need in China to feed every family there?  Hmmm lets see, the population of China is around 1.325 BILLION people.  So let’s say 1 turkey for every 3 people… so that would be four hundred and forty one million, six hundred and sixty six thousand, six hundred sixty six freaking turkeys!!! (441,666,666). 

Clearly China is the 100lb gorilla taking the world by storm.  I mean just look at the run that Baidu (BIDU) stock had, what an unbelievably huge run.  Chinese stocks can be huge runners and huge winners for the simple fact that there is such large untapped market potential for all sorts of products, everything from fertilizer to solar panels.

YGE is looking damn good right now as a potential setup.  YGE does solar panels in China.  Solar stocks from my experience seem to be somewhat of a bumpy and unpredictable ride sometimes.  They can have some occasional really good periods of outperformance and then just go into hiding for ages.  Part of that could be due to the ever changing oil price as perhaps a rising or spiking oil price can make solar seem more cost competitive.  And incidentally from what I have seen in the oil charts I would not be surprised to see another trend higher in the oil price soon as we have recently seen the dollar break down into a new free fall mode.  That should support higher oil prices for a while.

Anyway, regardless of the funny mentals, the chart of YGE seems to be saying that YGE could be preparing for a big sustained run perhaps into the 20 range or higher.

YGE20090926

The price of YGE did a massive run from about 4 to 14 in about 2 months, then went into a long sideways consolidation of almost 6 months.  The 6 month part is what should be getting your attention because that is strong cause building and it would appear that YGE has spent almost 6 months time building steam or energy for the next run higher.

YGE tried to get a breakout going in early November and pierced the resistance line for a while and then broke back into the range and almost reached the apex of this large triangle as a test of support.

I would consider YGE in ‘babysitting mode’ right now as it needs to more clearly define that it is ready for prime time, and a real breaking trend move above 14 and change on advancing volume.

The chart has big potential and could also potentially be more of a ‘relaxed trend trade’ if there is such a thing because the price has a lot of cause to work with.

But again, as I indicated before, until YGE has shown that it is ready to run with the bulls it needs a lot of close attention and baby sitting before it gets the real green light.

I am going to do a follow up at some point on YGE as clearly there is something important going on here.

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