Solar Shines Again

Up 40% in one day? And almost all stocks in the same sector? Yes this happens to almost all Chinese solar stocks after the announcement that the Chinese government is planning to subsidize solar power installation. And with the solar stocks hammered so badly, many of them are seeing single digit P/E ratio which make the stock price really attractive. So 40% gain across the board isn't a surprise. Here are how the Chinese solar stock did today:

• Canadian Solar (CSIQ) +27.54%
• China Sunergy (CSUN) +30%
• JA Solar (JASO) +41.73%
• LDK Solar (LDK) +31.75%
• ReneSola (SOL) +40.68%
• Solarfun (SOLF) +41.74%
• Suntech Power (STP) +43.82%
• Trina Solar (TSL) + 40.76%
• Yingli Green Energy (YGE) +44.82%
  

Save From Bankruptcy

No we are not just talking about a company but the entire industry of auto suppliers. As the demands of car fall off the cliff, the downstream (or in this case upstream) industries are also deeply impacted. And one of the industry got hit the most? The auto suppliers.

Following the faith of the auto maker, the auto suppliers stocks have also been on the slide for the past 52 weeks and were trading around a dollar or in many case even below a dollar. Fortunately with Obama's announcement of a $5 billion dollar support to the industry today, the auto suppliers seem to be getting a relief from the financial storms. As a result the stocks all went sky rocketed.

So let's see the performance of some of the auto suppliers:

• Lear Corporation (LEA): $1.33 +84.72%
• Tenneco (TEN): $2.70 +30.43%
• TRW Automotive Holding (TRW): $4.38 +36.02%
• Nobel International (NOBL): $0.42 +94.44%
• Visteon Corporation (VSTN): $0.29 +81.25%
• Delphi Corporation (DPHIQ): $0.07 +66.67%
  

Signs of Bottoming?

So what's going on with the banks?  Just not long ago investors are so afraid about all banks going for nationalization that they dumped the once so called blue-chip banks as if they are going out of business like Circuit City.  Therefore we saw used to be stars such as Citigroup(C) and Bank of America(BAC) trading as low as 97 cents and $2.53 respectively.  And both of them are part of Dow 30 stocks.

When the bears were ready for their last strike on these two dying banks, the positive comments from the CEO resurrect the bulls back as both company saw their stocks rose almost 100% in just 3 days.   

So could this finally be "The Bottom" we've been looking for?  With both stocks all trading at multi-year low, even this my not be the real bottom, as long as the banks are "too big to fail", this may be the best time to invest.

The Price Didn't Make Sense

Two days ago my co-worker was telling me that the price of General Electric(GE), at the time trading at $7, was just ridiculously low and just didn't make any sense. Since he isn't a trader at all, I had to explain to him that the price of the stock is not driven by fundamental but mostly by psychology of investors. This is why you would see stock undervalued. And this is exactly why legendary investor Warren Buffet can make so much money - buy cheap undervalued stocks.

Then I told myself, "He's damn right. The price just doesn't make sense anymore". So I turned my doubt into action and bought GE even though I normally don't touch those 'stable blue chip' stocks. Today that stable blue chip stock rallied almost 20%, more than three times the gain from the indices.

So next time if you ever hear someone talk about the same thing again, maybe it's time to turn someone's doubt into profit.

The Dawn of Stem Cell

After years of suffering, the stem cell companies finally see light at the end of the tunnel as President Obama may overturn the long term ban on embryonic stem cell research on Monday.  Because the news comes after the market is closed so you will have to see the after market price to see the effect.  

The following stocks see huge after hour surged after the announcement:

• StemCell Inc. (STEM): The stock closed at $1.38 but surged 66% to $2.3 in the after hour trade.  The highest the stock was traded for the last 52 weeks was $3.07.
• Geron Corporation (GERN): The stock surged 40% from closing price of $3.87 to $5.41.  The 52 week high for the stock is $8.5.
• Aastrom Bioscience (ASTM): This penny stock stem cell company jumped the most from 33 cents to 60 cents during after hour trading - a 82% jump.  It has been trading below $1 for more than a year though.

So still dare to invest in these stocks?  Maybe they'll jump even more after Monday.

Second Chance for Tim

The Tim we know, Tim Geithner. Today at 12:30 EST our supposedly financial savior will testify on President Obama's budget plan. The last testimony was a disaster as the new appointed Treasure Secretary failed to deliver any detail about the financial rescue plan and caused planic and sell-off to the financial industry. On the other hand, Bernake's testimony gave optimism and helped to spark a short rally.

So it is now about an hour away from Tim Geithner's second chance to bring investors confidence back. It is really critical as the investors are looking for any, if there is, positive comment out of the dismal situation. So Tim, here's your second chance. Don't screw it again.

Where do we go next?

Dow is now under 7000. Since last October the investors have fought hard to keep the Dow stay above 8000 and sometimes even try to make it above 7500 - the lowest during the dot com bust. Unfortunately in late February the line was breached and things kept going south as nothing seemed to stop the slide.

So here we are right now. Sitting around 6900. People may say this is now the best time to invest. However, at this point, I would advice to be super cautious, hold on to your ammo and prepare for the next rebound. Yes, now you are getting the stock at super discount price. However you may also caught the wave of bankcupty and bought a worthless stock. So beware, hold on to your cash or at least look for company with tons of cash in hand.