Solar Sector Selling Off; Axiom's Johnson Worried About 2H, Suggests Shorting CSIQ, YGE, TSL

Stocks in the Solar sector are under pressure Tuesday afternoon: First Solar FSLR shares are down nearly 4 percent at last check, Canadian Solar CSIQ shares are down 6 percent, Suntech STP shares are down more than 3 percent, shares of LDK Solar LDK are down almost 5 percent, and shares of Trina Solar TSL are down about 1 percent. With NYMEX Crude oil relatively quiet on this low-volume summer day, traders are attributing a portion of the weakness to some concerning comments from long-time solar bear Gordon Johnson of Axiom Capital. In a note published Tuesday morning, Johnson said he is modeling for solar module prices to continue falling heading into the back half of this year. Johnson believes the second half of 2013 will end up being worse than the first half. Johnson warned of elevated Street expectations for Japanese installations. Citing numerous channel checks over the last month or so, Johnson believes excess module inventory in Japan will be an issue for manufacturers moving forward. The Axiom analyst suggested investors take a look at shorting the stocks of companies which have already reported Q2 results. Johnson mentioned Canadian Solar, Yingli YGE and Trina Solar. The Guggenheim Solar ETF TAN is down 1.5 percent at last check.