Image source: SolarCity. 

What: Shares of Residential solar-power player SolarCity Corp (NASDAQ:SCTY.DL) jumped an incredible 23% in April, only to give back those gains and more so far in May. What is going on with SolarCity?

So what: There weren't any huge news items driving SolarCity shares higher; it was more a case of the stock recovering from a huge decline in the past year. The market reacted positively to San Francisco announcing it will require solar on all new construction. But that's probably a short-term bump because it would be a very small incremental boost for a company like SolarCity. 

In May, hedge fund manager Jim Chanos said he was still short the stock, and sees "financial trouble" before the year is out. Chanos has had a long-short position in SolarCity, and he helped put the company's flaws in investors heads last year.

Then the company reported two terrible earnings reports. With first-quarter financials coming on Monday, that may now be in the back on investors' minds. 

Now what: After two bad quarters, there's so much uncertainty for SolarCity, that I want to see how the company is doing before jumping into the stock head first. Nevada's change to net metering caused the company to flee the state in late 2015, which will be a negative, and we may see customers shifting to cash or loan purchases instead of SolarCity's preferred lease or power purchase agreement.

With all of the volatility and uncertainty, I think it would be wise to reassess what direction this company is headed after next week's earnings report.