LDK was one of the leading stocks in the Solar trend till last week when news broke out that its financial controller had alleging cooked financial books and inventory discrepancies.
The stock experienced a major fall from 70 to as low as 43 in just 3 days. It was a major shock if you were long the stock and had not set the proper hard stop limit or mental stops.
I have been playing this stock on the long side since mid Aug in low 40s and I am glad I exited my positions in 70s. If you look at the chart carefully, you would know why I sold it in 70- hitting of upper trendline.
I think it is a good time to buy this stock for a bounce back to 56-60 for the following reasons:
1) Nice strong hammer on Friday
2) Bounce from lower trendline
3) Fibonacci retrace of 61.8% completed
4) Slow STO oversold
This will be a technical bounce and has nothing to do with the fundamentals of the stock or inventories/financial statements.
Good Luck Everyone !!!
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