I've gotten some great responses from you folks about my new “Global Survey” project. I've also gotten several questions from you.

Here's one from Market Report reader S.H.:

“I would like to know what you think about various solar energy companies (many of which are part of the TecDAX), like Solarworld, Conergy, Ersol, et al. They had quite a rally already -- are they still worth the risk, or would it be better to wait for a major correction?”

The TecDAX is Deutsche Börse Group's index of 30 mid-cap companies specializing in technology. Here are the symbols for the above- mentioned stocks:

Solarworld (SWV:Frankfurt)

Conergy (CGY:Frankfurt)

Ersol (ES6:Frankfurt)

Solarworld does look toppy, and it did have a severely overbought signal flashing in early February. Since then, both RSI and Money Flow have dropped, causing Solarworld's price to drop 8.5€.

Ersol is currently giving off a slightly overbought signal, but is coming down from a much stronger overbought signal. The thing is, it doesn't look toppy like Solarworld. In fact, Ersol has another 10-13€ before it reaches its previous high of 71€.

Conergy, though, could perhaps be in the worst shape. Here's a look at the chart…

Conergy is setting itself up for a huge potential fall. This formation could be a double top, a bearish formation that loses an average 20% from its breakout point.

Now, 20% isn't too extreme, but Conergy's breakout point makes it a very drastic move.

A double-top formation looks like an “M.” The valley between the peaks is the breakout point. For Conergy, that point is at 32.05€, a fall of 47.2%. A further 20% decline puts the company at 25.64€ for a total potential loss of 57.8%!

If Conergy rounds over, we're in for a huge slide. The first fall will drop the stock from 60.70€ to right around the 50€ mark. If it falls below that support line, it a clear drop to the breakout point and beyond.

In my opinion, these three examples are pretty dangerous right now, especially Conergy. The only potential upside I see is with Ersol, and its possible 10-13€ climb to previous highs.

Solarworld's downside could have it testing 40€ a share. It's run up to its previous high and couldn't get past it. The stock may yet do so, but not until its correction plays out, and that could be over the next six months.

These aren't cheap stocks, and the downside potential makes me very apprehensive about these high levels.

If you're not in, don't get in. If you are, protect yourself with a strict stop-loss strategy.