Monday, April 18, 2011

Hanwha Solarone Company Ltd (NASDAQ: HSOL) Q2 2011 Price Target

Recent price: 6.77$
P/E Ratio: 4.21
3 Months Target Price: 10$

Company Description
Hanwha SolarOne Co., Ltd., formerly Solarfun Power Holdings Co., Ltd., is a manufacturer of silicon ingots, photovoltaic (PV) cells and PV modules. It also provides PV cell processing services and PV module processing services. It sells PV cells and PV modules both directly to system integrators and through third party distributors. During the year ended December 31, 2009, the Company sold its products to over 40 customers in Germany, the Czech Republic, Portugal, Australia and China. The Company conducts its business in China, through its operating subsidiary, Jiangsu Linyang Solarfun Co., Ltd., based in Linyang China.

Confidence Margins
Strong resistance $11.58 (+71%)
Light resistance $9.75 (+44%)
Light support $6.57 (-3%)
Strong support $5.61 (-17%)

Hanwha Solarone Company's stock price as been recently hit with a lot of analyst downgrades. Taking those evens into account, it seems that the company is currently on the verge of a good technical rebound. It will provide great returns to investors who will prove to be patient.

Entry strategy
For the cautious investor:
Buy the stock for 7$ or less.

For the risk-taking trader:
The June 2011 7$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 60$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 9.75$, or keep it until 11$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 9.75$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

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