Short: FSLR (178.20) First Solar bear flag is ready to break lower

Rationale: After rising from a deep momentum MACD low, FSLR as well as many solar stocks are ready to re-test their previous lows. The daily MACD indicator hit sharp new lows on January 17, 2008 and has since bounced through the faster signal line (see red eclispse), however, now the fast blue MACD line is poised to pullback to the slower signal line which inevitably means a drop in stock price to previous low levels. Also expect the 14 day ADX to gradually fall as the daily price downtrend begins to lessen.

Suntech Power (STP 48.81) is also exhibiting a very similar downward formation.

Target: $158

Stop: 191.50