Bookkeeping: Restarting Trina Solar (TSL)

With my sell off of Solarfun Power (SOLF) to a minuscule exposure, I have decided to restart a position in the neglected name in the sector Trina Solar (TSL). I last owned this name in late October [Rather be Safe than Sorry: Closing Trina Solar]. After an implosion post earnings about a month ago, the stock finally looks poised to break out. While the rest of the solar sector has been screaming higher, Trina Solar has been consolidating in a tight range of $46 to $52 for over 3 weeks, doing just about nothing except frustrating those wondering why this is the only solar stock that never moves. This is the type of base that a nice breakout 'could' occur from. A move north of $53 would be preferred but with institutions sitting home, and retail investors driving up stocks in the sector with far less fundamental strength than Trina, the potential for a rotation into this forgotten name is possible.

As another benefit the stock is sitting right above its 50 day moving average, right at $50, so we have a clearly defined downside. If this is a false breakout, similar to December 10th, one can reduce exposure and wait for Trina to be rediscovered again. Generally I would wait 1 more day to buy this type of chart, but with the mania currently happening in the sector, any stock has the potential to gap up in the morning 10%+ for no particular reason other than it is their turn to be the 'chosen one'. So in a more sane situation I'd wait for a confirmation day.... However, if solar continues to go on this war path for the remainder of the week we could have a nice move. But we have a very nice playbook to work for on this position with limited downside and potentially large upside.

Due to familiarity with this name, I restarted this position with a larger than normal beginning stake of 500 shares or 2.1% of the fund. Purchases are in lower $52s. On a breakout over $54 I will add more exposure as this would indicate Trina has found more 'believers'. On a fall back below the 50 day moving average ($50) I will cut this position down and use cash elsewhere - however I expect Trina Solar to have a solid back half of 2008 so hopefully management can start delivering - the 2 most recent quarters have not put them in the best light.

EDIT @ 3:50 PM - Trina is acting great so I added another 300 shares to take this to a 3.4% stake.

Long Trina Solar in fund and in personal account