With that said we have multiple names and I'd rather focus the next few months on the names which had the least warts and now are the "favorites". Valuation means nothing in this sector as we've owned the cheapest name in the group for a year now and it has done nothing but lose us money. We took Yingli Green Energy (YGE) out in the mid $16s after a ho hum reaction to its earnings [Aug 6: Closing Yingli Green Energy] and it is now struggling around $15 after dropping to the mid $14s. We cut back Canadian Solar (CSIQ) ahead of earnings anticipating a potential adverse reaction to currency risk [Aug 12: Some Adjustments to Solar Patch]. This came to be true - CSIQ was near $31 when we sold and has now fallen to $28, after dipping to $27s. I thought the earnings reports were fine, but as I said above - this sector is strange in that favorites change from 1 quarter to another and once you are out of favor it can last a while. Right now the charts for these 2 are simply not as attractive as other names in the group so if I increase exposure I'd rather add to one of our names that currently has the investors favorite. CSIQ north of $33 and YGE north of $17 would be appealing from a technical perspective.
We only had 25 shares left of Canadian Solar (CSIQ) so simply as a bookkeeping procedure I'm closing this position out, and when/if these names show a better technical condition we'll consider adding them back. Until then, we have others to do the same job and give us the same exposure to the sector with charts in uptrend. And trust me when we come back again in November 08, these 2 names might be the "favorites" and all the money will switch to them. I don't pretend to understand it, but this is just the pattern - and I've been on the wrong side of that pattern citing "but I own the cheapest one, why does no one notice!" far too many times.
No position
