Which is the Better Bet Right Now? Westinghouse Solar, or Real Goods Solar? (WEST, RSOL)

My enthusiasm regarding Real Goods Solar, Inc. (NASDAQ:RSOL) and Westinghouse Solar Inc. (OTCMKTS:WEST) hasn't exactly been a veiled secret. Though I've favored one over the other at various times since the entire solar panel industry went back into high gear in the middle of the second quarter, I've been a fan of both RSOL as well as WEST for a while. The trick has been finding the right entry spot for both of these volatile stocks.

That being said, though my call on Westinghouse Solar is finally coming to fruition - and generating some profits - for anybody who stepped in on my advice, Friday's breakout isn't a reason to buy here. In fact, it's a reason not to buy. If you're looking to get in on the still-budding solar rally, then I'm back to Real Goods Solar as the way to play.

First things first. Yes, I'm the same guy that was singing Westinghouse Solar's praises just a few days ago, suggesting a breakout was practically imminent back on September 12th. We got that pop on the 20th, in spades. Problem: The move was a little too hot to handle, and as I explained on the 24th, newcomers should wait for a dip ... a dip that materialized starting the net day, mind you.

Yeah yeah yeah, but that was then and this is now, right? WEST blasted past its key 200-day moving average line on Friday - on huge volume no less - making this rally the proverbial "real deal." Well, maybe, but in the same sense (and the same way) Westinghouse shares were overbought and due for a dip a week ago, they're due for a dip now. In fact, they're already giving us that dip. I've just got a feeling there's more ground to give up before WEST hits bottom and starts to recover.

If you're looking for a place to put that money that would have otherwise been invested in Westinghouse Solar Inc., the name you want to look at is Real Goods Solar, Inc.... again.

From a technical perspective, RSOL is simply much healthier than WEST is at this point. Specifically, RSOL isn't overbought, and if anything is just starting to re-develop some momentum. The big bullish clues here are the way the stock pushed up and off the 200-day moving average line (green) in late August, and found support at the 20-day and 50-day moving average lines (blue and purple) last week to spark Friday's bounce above not only the 100-day moving average line, but also above a key horizontal ceiling at $2.50 (red). Putting them all together, and what you have is a very bullish undertow. But, more than anything, what makes Real Goods Solar superior to Westinghouse Solar shares as a trade right now is that it's not overbought and pulling back.

With all of that being said, don't interpret this as a permanently-bearish outlook on WEST; that's not what this is. I think both stocks are destined for better days in the long run, as the solar panel industry is starting to grow again as the supply and demand relationship turns healthy again. I'm just trying to give newcomers to that trend the best start they can have.

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