SunPower Corporation designs, manufactures, and delivers solar systems to residential, commercial, and utility customers. It operates in three segments: the Americas, the EMEA, and the APAC. The company offers solar power products, including panels, balance of system components, and inverters. It also designs, manufactures, and sells high-performance rooftop and ground-mounted solar power systems, as well as utility-scale photovoltaic power plants. In addition, the company offers operations and maintenance services, including remote monitoring, preventative, and corrective maintenance services, as well as rapid-response outage restoration and inverter repair services. Further, it leases solar power systems to residential customers. The company serves investors, financial institutions, project developers, electric utilities, independent power producers, commercial and governmental entities, production homebuilders, residential owners, and small commercial building owners.
Please take a look at the 1-year chart of SPWR (SunPower, Inc.) below with my added notations:
SPWR has been trading sideways for the last 6 months, trading between the $28 and $35 area. In addition, the stock had held an important level of support at $28 (blue) during that entire period of time. That level had also been a prior 52-week high resistance. Last week SPWR finally broke that support and should be moving overall lower from here.
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The Tale of the Tape: SPWR had a key level of support at $28. Now that the stock has broken support, a trader might want to enter a short trade at or near the $28 level with a stop placed above that level. A break back above $28 could negate the forecast for a move lower.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach