SolarCity Corp (NASDAQ: SCTY)

SolarCity Corporation designs, installs, and sells or leases solar energy systems to residential and commercial customers, and government entities in the United States. It offers solar energy systems; solar lease and power purchase agreement finance products; and energy efficiency products and services, as well as develops a proprietary battery management system, which is designed to enable remote, bidirectional control of distributed energy storage that can provide benefits to customers, utilities, and grid operators. The company also sells electricity generated by solar energy systems to customers. It offers its products and services through direct outside sales force; door-to-door sales force; call centers; channel partner network; and robust customer referral program.

To analyze Solar’s stock for potential trading opportunities, please take a look at the 1-year chart of SCTY (Solar City Corporation) below with my added notations:

1-year chart of SCTY (Solar City Corporation)

After running up nicely from September to February, SCTY has fallen relatively quickly since. Today the stock took another leg down by breaking the key level of $50 (blue). The next level down would be $45 (red), but with earnings coming out yesterday, anything could happen.

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The Tale of the Tape: SCTY has key levels of $45 and $50 to watch. A short trade could be made on any rallies up to that $50 or on a break below $45. Long possibilities would be either on a continued fall to $45 or on a break back above the $50 level.

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!

Good luck!

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