Solar Stocks Screaming Higher

With the SPY off by 1.07%, Solar Stocks are showing a notable divergence today. Shares of Yingli Green Energy (NYSE: YGE), Suntech Power Holdings (NYSE: STP), and Trina Solar (NYSE: TSL) have all reversed off of the lows of the session and pushed into green territory. STP is higher by some 3.70% now, trading at $2.52. YGE is higher by 4.63%, at $4.07.

All three names have been under severe pressure for the past three months, sliding lower seemingly every single trading session. Since the beginning of October however, these names have begun to base sideways and are now hovering on or below the 20-day moving average (YGE has already broken above the 20-day). This pattern, along with the positive volume they are seeing today, indicated that the stock could see short-to-medium term follow through to the upside.

Short interest is also in play here, as all three stocks have greater than 13% of the float short. Trina Solar has a whopping 23.92% short interest.

What's the Trade? Traders have several ways to play the move in these names. Equity traders can buy shares here with stop losses on today's lows. Options traders can look to buy in-the-money call strikes or risk reversals on the individual names.

Trina Solar Limited is an integrated solar-power products manufacturer based in China with a global distribution network covering Europe, North America and Asia.

Suntech Power Holdings Co., Ltd. is a solar energy company, which is engaged in the design, development, manufacturing and marketing of photovoltaic products.

Yingli Green Energy Holding Company Limited is a vertically integrated photovoltaic product manufacturer.