I can’t think of a company more entrenched in a monstrous trend than China’s NF Energy (NFES), and if a week-long 45% surge and today’s updated clean energy stats are indicative of what the future holds, shareholders are in for the ride of their lives.

Multi-billion dollar stimulus packages from China and the U.S.—with the bulk of money already put to work by the Red Dragon—boosted spending in the renewable energy industry for Q1 2009 by 12.4%. Spending on wind power led year-over-year increases with 38.5%, while coal-fired generation dropped 15.3%. Hydro and geothermal also grew but at slower paces, 1.1% and 1.7%.

During the year, China went from a small player in wind energy to becoming the world’s largest generator of wind power. China also led the global world in clean energy investments for 2008, responsible for 18% of the 27% overall $36.6 billion increase.

It marked the first year ever that investment in clean energy topped fossil fuels. Perhaps the most eye-opening statistic for NF Energy and its shareholders is that while investors (private and public) poured a record $155 billion dollars into clean energy companies and projects worldwide in 2008, that figure falls far short of the figure it will take for countries to meet their carbon emission targets.

Try this on for size: In the U.N. Environment Program (UNEP) report, “Global Trends in Sustainable Energy Investment 2009,” it says “a minimum of $750 billion” is necessary to finance a sustainable economic recovery by investing in the greening of five key sectors: buildings, energy, transport, agriculture and water. That’s equal to 37% of the economic stimulus packages and 1% of global GDP.

So, you get the picture: There’s simply no end in sight for companies like NF Energy who are in the global hub of renewable energy and attached at the hip of China—the world’s biggest spender on the very products and services it sells.

We’re off to a pretty good start with my newest idea- NF Energy.  Picked at $.69 this past Wednesday post close, the stock has since seen a high print of $1- net 45% in the early going from bottom to top if you traded it perfectly.

On Thursday the stock traded the highest volume in its history and a penny below the highest price. Investors are already recognizing the value this one offers with $.10 in EPS last year. With the growth they should deliver in ‘09, value wise anything up to $1 is a bargain basement value in my view.

However, value is not always the immediate story. The chart plays a role as well, so it’s worth taking an early look at the chart and starting to think about the possibilities of a pullback. After all, this little stock has come a long way in a short time.

Here’s a look at the chart over the past two months. It started out as a $.20 stock.

It peaked out with a five fold move in short order, so a little pullback could be in order simply on a technical basis.

If it were to pull back, I’d be looking at the $.70 level as the ideal entry point.

Not only is it the 38.2% retracement level, it’s also the point at which the stock would pull back to the uptrend line. As long as the stock does not trade below that 45 degree angle line, it’s still in an uptrend.

I don’t know if it is going to happen. It certainly has traded up to this level quite easily. It might just continue higher. On a value basis, it’s entitled to.

I only bring this up to help investors have a plan for a pullback. It’s hard to say what’s going to happen.

Also, this posting will give you an opportunity to ask any questions you might have about the company.

Comments and questions are welcome.

More good news popped up on the China front today, boding well for FXI  (our China ETF). GDP forecasts for 2009 and 2010 have been lifted from 6% and 9% to 8.3% and 10.9%.

These updated figures should go a long way toward impressing economists who questioned whether 6% growth could support the 25 million people migrating from rural areas to cities in search of employment.

Since we first suggested buying FXI-and turning a deaf ear to disbelievers-FXI has soared 40%. There’s no telling how high it may go now that the possibility of double-digit growth is back in the picture.

Could you imagine how any U.S. index would react even with the potential of 6% growth in the GNP? The bull would chase out the bear quicker than you can say, “I love America.”

Interestingly, the adjustment in China’s GDP is attributed to the global crisis triggered by the financial mess on our turf.  Like most global markets, China came tumbling down; although it had its own share of problems to work out.

However, it seems that the Chinese don’t stay down for long. They responded quickly to minimize damage from the Asian crisis in 1997, and they’re bouncing back quickly today with a very successful $600 billion stimulus package of their own.

Chinese officials have earmarked a good chunk of the money for an infrastructure overhaul and full medical insurance policies for its population, 90% of which should be implemented by 2011.

Many believe that China will leap ahead of Japan to become the second largest economy in the world. I’m not sure where that will leave the U.S., but maybe we ought to take a few pages from their book on growth.

Currently trading around $35, we believe this ETF could trade into the $60 to $80 range next year.

Comments and Questions are welcome.

I love the China ETF- FXI. I believe China has the ability to come out of the global recession far faster than we do, and this ETF is so oversold is pretty absurd. After all, China’s stimulus package of $600 billion is 20% of their GDP. There are many bridges, roads, schools, and lots of other infrastucture to build there. There’s no toxic mortgages, and the banks are in no trouble. China has lowered interest rates 5 times in the last 4 months, and the January lending rate for the banks was double 2008.

FXI puts you in the best position with the least risk to benefit. As a bonus you get a 3% cash dividend at the current price.

I had a buy on that one at $28, and a strong buy at $25. Today we closed at $25.15, so dip time is the time to pile in. The chart looks far better
than anything in US equities. Since making it’s all time low in late October, the lows are getting higher, and the highs are getting higher. From my
recommended entry level there have been several opportunities to trade out for $5 point gains in the last 3 months.

Comments and questions are welcome.