×

'Great time to buy' this solar stock: Top chartist

Shares of SolarCity recently lost some 35 percent from high to low, but that doesn't concern Carter Worth. In fact, the chief market technician at Sterne Agee says that that's just the sign you need to buy the stock.

Worth points out that the stock has lost 35 percent twice before—from May 2013 to June 2013, and from the beginning of November to the end of the month. And both times, the 35 percent decline marked the perfect time to buy.

Now the stock has lost 35 percent once more, and this decline "is exactly the same, by our work, as the other two times," Worth said on Friday's episode of "Options Action."

"Take advantage of this weakness," Worth advises.

To burnish his point, Worth provided a chart of the stock compared with its 150-day moving average.

"What we know, of course, is that you have these high-volume bursts up and light pullbacks," Worth said. And each time "we're off the 150-day, off the 150-day, off the 150-day."

Read MoreSolar's spike tied to oil prices? Don't bet on it

Given that shares of SolarCity are bouncing off of their 150-day moving average after a 35 percent decline once again, "this is a great time to buy the stock," Worth said. "We like it a lot. We think there's all kinds of upside potential versus downside risk."

Shares of SolarCity seemed to react immediately to Worth's call. As he made his bullish case on Friday after the close of trading, SolarCity shot up 2 percent in the after-hours session.

Latest Video

Tutorials

Host Bio

  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

Options Action Traders

From Our Sponsor

Options Action Newsletter:

Sign up to receive exclusive Options Action content. Each month you'll receive an exclusive message from host Melissa Lee and insight directly from one of the members of our Options Action panel. Keep your pulse on the market with the Options Action newsletter.

Please enter a valid email address
To learn more about how we use your information, please read our Privacy Policy.