Is JA Solar Ready for a Rest?

Published on Friday, 13 January 2012 08:32 Written by TradersHuddle Staff

New York, January 13th (TradersHuddle.com) - Shares of JA Solar Holdings Co., Ltd. (NASDAQ:JASO) closed the trading day at $2.02 well above its calculated resistance at $1.40, which was calculated from a peak and throughs algorithm, making traders worry about a possible pull back in the stock price.

JA Solar Holdings Co., Ltd. (NASDAQ:JASO), through its subsidiaries, engages in the design, manufacture, and marketing of high-performance solar cells. The company sells its products to solar module manufacturers who assemble and integrate solar cells into modules and systems that convert sunlight into electricity for power generation. JA Solar is based in Shanghai, China.

JA Solar's stock broke out of its defined range that had support at $1.30 and resistance at $1.40. Now the stock is working on developing a new trading range, which should be defined by the high setup after this breakout and its probable support, which could be its previous resistance level $1.40.

From a technical perspective traders should wait to establish a position in JA Solar until a base in the stock develops that can provide good reference points to the upside and most importantly to the downside, for traders have a risk reference point before entering into a position on JA Solar stock.