Has ReneSola Got Nowhere To Go But Up?

It's been a rough year for ReneSola (NYSE: SOL), to say the least. But maybe shares have hit bottom and can only go up.

Shares of the Chinese manufacturer of solar wafers and provider of solar modules were beaten down to a 52-week low of $2.65 last week, an almost unimaginable fall from their 52-week high of $15.34.

Shares have jumped since the low seen last Tuesday, August 9, when the company came out with second-quarter figures. Yesterday, shares closed at $3.78, a rise of nearly 43% from the low. Such gains are usually only seen in options and leveraged ETFs.

Second-quarter figures and outlook were disappointing, as almost everything concerning ReneSola has been in 2011. It missed badly on earnings-per-share estimates--.02 per share versus an expected .16 per share--and chucked its full-year guidance.

Though shares are still down 56% year-to-date, it is rated as the 8th best solar stock according to China Analyst. According to Yahoo! Finance, the P/E ratio for ReneSola is less than 2, so even after the big jump from its low, the company is still priced to barely eke it out, doing little more than just survive going forward.

We wrote back in late June that ReneSola was getting clobbered and might not get back up, and it did take a further beating, but now the company might be getting back on its feet.

TheStreet Ratings Grade continues to be a Hold. On the other hand, SmarTrend still has ReneSola in a downtrend that it issued on May 17.

If ReneSola has bottomed, there really is nowhere to go but up from here, especially if the solar sector comes storming back after being beaten down especially hard over the last month. ReneSola could be an excellent play here for an investor looking to get into the solar sector.

ACTION ITEMS:

Bullish:
Traders who believe that ReneSola has bottomed and solar in general will go up might want to consider the following trades:

• Buy shares of ReneSola (NYSE: SOL)

• Guggenheim Solar ETF (NYSE: TAN)

Bearish:
Traders who believe that ReneSola will continue to fall and the solar sector will decline further may consider these alternate positions:

• Short shares of ReneSola (NYSE: SOL)

• Buy Guggenheim Solar ETF (NYSE: TAN) puts

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