Add-on Buy:(SOL)

(SOL) continued to show strength again today, retaking the 50 dma while gaining over 10% - albeit on less explosive volume than I would've liked to see (it increased about 30% over average). While it's not good to be in the habit of making excuses for a stock, I'm not surprised that the volume was lacking a bit. If indeed the institutions can pick up shares tomorrow for what I calculate to be around $18.70 a share, I'm honestly surprised it moved as well as it did today. For now, the action of the last couple days seems to confirm that the downward pressure on the stock has been 'artificial,' and once the secondary offering is complete (SOL) is ready to resume it's uptrend.

I took a second position as the stock crossed the 50 dma at $19.43. I could've had it for less numerous times over the last few days, but I wanted to see the stock clear this key level to show some strength in the bounce. It's now 22% above the recent lows and in position to recover the 10 wma next.

I did break one key rule in buying (SOL) today, as the market is not in a confirmed uptrend. I've mentioned time and again that the direction of the overall market trumps all other factors, so anything I say here may just be an excuse. The truth is, from everything I've seen with (SOL), and with the explanation that I believe for the drop in share price, I think the stock has a run in it up to the low to mid-20's. The $23 level looks like it might offer some resistance in the short term.

My thought is this - if the stock moves like I think it will, great. I'll trail my stop order up on the second position to minimize my risk - right now it's 5% below my purchase price. If I can get a 20% gain I'll move my stop there to lock that in, and let it run if it wants to. Meanwhile I'll still have to decide what to do with my original purchase - as crazy as it may sound I'm still inclined to let that ride.

If the market was really trending down, I probably wouldn't make this play. It isn't going in the tank though anymore than it's rallying. We seem to be seeing a classic summer sideways action for now.

Maybe I've just been following this stock so closely that I've fooled myself into thinking I know something about it. I'll find out soon enough.

-Geoff