ReneSola (NYSE: SOL): Under $5 Stock Could Soar 30% in the Next 8 Weeks

Earlier this month, China's National Energy Administration issued an updated policy concerning distributed generation of solar power. Basically, the changes were meant to encourage local governments to promote the increase of solar installations on the rooftops of private homes and businesses. Buyers understandably flocked to solar power stocks.

ReneSola (NYSE: SOL), a Chinese manufacturer of solar wafers and modules, was a big beneficiary of renewed investor interest. The small cap soared on the news and was up more than 20% in three days before backing down a bit. But don't let that percentage scare you, as the stock trades at very low prices. What is more important is that it scored a technical breakout that suggests there is a lot more upside ahead.

Before continuing, I want to emphasize that a stock with a low dollar price is not necessarily cheap. If the prevailing trend is down then low prices can get even lower. What is critical is that the stock show signs of strength in the form of investor demand, upside momentum or a surge in volume and/or volatility. Preferably, it will have all of these, but perfect setups are not the reality most of the time.  (more)

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