Every Expert Says this Stock Should Be Dead. Here’s Why It's Crushing the Market...

Pop quiz, hot shot…

Which stocks are getting dumped quicker than a barrel of oil this year?

Time’s up!

Answer: tech stocks. Even mainstream rags like The New York Times are beginning to notice. The old gray lady is just catching on that the market’s beloved FANGs are down an average 17% this year. No secret to us though. We noticed when these stocks first start flaming out…

But today we’re riding on one mega comeback tech trade the Times might figure out by March. Next March. By that time, we’ll have grabbed some blistering gains off this contrarian play.

In the meantime, short sellers continue licking their chops—and filling their plates at the technology buffet. They’re now eyeing up their latest prey: Tesla Motors.

Tesla stock has already dropped about 40% this year alone. But short sellers think there’s plenty of chow left at that table. In fact, they upped their bets.

“Shares borrowed as part of the first step in a short sale rose to 26 percent out of the total outstanding, just below the record set Jan. 21, data from Markit Ltd. Show,” Bloomberg reports. “While cheap oil reduces the appeal of electric cars, investors have been dumping stocks with triple-digit valuation — and Tesla trades at 204 times projected profits, more than 10 times the median of shares in the Nasdaq 100, Bloomberg data show.”

Short Seller

Analysts were looking for wider losses from the electric car company last night. Tesla delivered a revenue miss, yet topped delivery estimates. And while shares popped higher after hours, the stock looks ready to open about where it left off yesterday afternoon.

Despite these glimmers of hope, Elon Musk seems to be losing his touch this year. Tesla is seizing. And his second public endeavor, Solar City, is now trapped in stock market hell after posting terrible earnings expectations and a bigger than expected quarterly loss. Shares dropped a piping hot 29%… yesterday.

Solar City’s tank-job runs headfirst into one of our trades of the year: a solar comeback story.

This big trade has a contrarian angle. Most investors think alternative energy stocks are worthless now that oil is practically free. Everyone was pounding the solar sell button last year. The Guggenheim Solar ETF fell more than 35% from April to December.

But by the fall, it was looking like the ETF was putting in a bottom. Solar names were actually rallying earlier this year when oil was tanking.

The fun didn’t last. Solar—one of 2015’s biggest flops—was sucked down the drain with the rest of the market…

Guggenheim Solar

That bottom we were looking for? Gone. This week, TAN continues hitting new 52-week lows.

Thankfully for us, not all solar stocks are out of juice…

We picked up shares of First Solar Inc. (NASDAQ:FSLR) at the very beginning of December. And when we did, I told you that First Solar is hands-down the best looking solar stock on the market right now. Now, even with the majority of the competition taking a nosedive, First Solar continues to shine.

First Solar

Does First Solar care that the market is a mess right now? Doesn’t look like it. All I can see is a powerful uptrend. After bottoming out in late September, First Solar hasn’t looked back once. This stock is in full-on recovery mode. That’s no small feat in this crappy market…

If you snagged this trade when we first released it one month ago, you should be sitting on open gains of approximately 10%. Not bad for a solar stock that still is getting little to no attention from most investors.

In this broken market, we have to be especially choosy when it comes to big trades that could carry the portfolio this year. So far, First Solar looks like one of those names that’s ready to deliver…


Greg Guenthner
for The Daily Reckoning

P.S. The comeback story of the year? Stay on top of what’s going on in the market–sign up for my Rude Awakening e-letter, for FREE, right here. Stop missing out. Click here now to sign up for FREE.

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