SunPower Stock Shines a 'Buy' Signal

SunPower Corporation (NASDAQ:SPWR) is up 9.6% to trade at $9.31, on track to finish about the $9 level for the first time since Dec. 22. Earlier in the week, however, the solar stock pulled back to within one standard deviation of its 40-day moving average. This SPWR pullback may have marked a buying opportunity,as the trendline has historically had bullish implications.

According to Schaeffer's Senior Quantitative Analyst Rocky White, following the last four pullbacks to the 40-day moving average in the past three years, the energy name was up an average 11.95% one month later. If past is precedent, a move of similar magnitude could put SunPower stock back atop the $10 level for the first time since its late-July bear gap.

Analyst sentiment still leans bearish. Exactly 60% of brokerages covering the solar stock rate the shares a "hold" or "strong sell." In addition, the average 12-month price target sits at $9.29 -- below current levels. Continued technical outperformance could prompt analysts to re-think their bearish positions.

A short squeeze could also provide more fuel for SunPower's rally. Short interest increased by 8.2% during the last reporting period to 13.30 million shares. This represents a whopping 23% of SPWR's total available float.

In the options pits, calls have been favored over puts among short-term traders. This is according to Schaeffer's put/call open interest ratio (SOIR) of 0.45, in the 10th annual percentile. Along those lines, SPWR options are cheap right now. The stock's Schaeffer's Volatility Index (SVI) of 52% ranks in the 15th annual percentile, meaning low volatility expectations are currently being priced into short-term contracts.