Just a few days ago, I made the following comment regarding SunPower (SPWR: sentiment, chart, options) : "...a continued rise in solar stocks could prompt some analysts to begin downgrading the group as it becomes too frothy for their tastes." Maybe I should have heeded my own advice when I took a closer look at Solarfun Power (SOLF: sentiment, chart, options) yesterday following the company's earnings report.

Zacks.com only tracks 2 analysts following SOLF - both with "hold" ratings as of yesterday afternoon. However, Goldman Sachs cut its rating on the equity to "sell" from "neutral" before the open this morning. According to Goldman analyst Cheryl Tang, "Though Solarfun raised 2008 shipment guidance and its market presence has been improving ... we believe that, given muted future top-line growth and looming margin and cash flow pressure, its premium valuation is unwarranted." Remember my "frothy" comment quoted above? Me too, and not without eating a little crow in regard to SOLF.

Following the downgrade, SOLF is down more than 23%, potentially rewarding some of the more stalwart short sellers comprising the 35% of the stock's shorted float. There is a ray of hope for the bullishly inclined, however. SOLF's decline has taken it to support in the 20 region, and its rising 10-day moving average. A bounce from this level would have positive implications for the shares.