SunPower Bounces to Fresh Daily Highs

Shares of SunPower SPWRB are popping this afternoon. Currently, shares are higher by 7.01%, trading at $9.46. The stock has been sliding lower for the past three months (off from highs near $23.00), but appears to have hit bottom. SunPower formed a bullish hammer pattern yesterday and is following through to the upside today, indicating that shares will likely not drift lower over the short-to-medium term. Upside price targets exist at the 20-day and 50-day moving averages, ~$11.00 and ~$13.75, respectively. Note that SunPower has 18.26% short interest, which will likely add fuel to any rally. Traders can play the name by buying the November 2011 $9/9 risk reversal for even money. This trade has essentially the same risk characteristics as long stock without the cash outlay. You will also have the option to sell upside calls against the position on a rally. SunPower Corporation is a vertically integrated solar products and services company that designs, manufactures and delivers solar electric systems worldwide for residential, commercial and utility-scale power plant customers.