SolarCity Corporation designs, manufactures, installs, maintains, monitors, leases, and sells solar energy systems to residential, commercial, government, and other customers in the United States. It offers solar energy systems; solar lease and power purchase agreement finance products; mounting hardware for photovoltaic panels; and related software, 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.
Take a look at the 1-year chart of SolarCity (NASDAQ: SCTY) with the added notations:
SCTY has been trending sideways since the fall of last year. Along the way, the stock has repeatedly found support around $46 (green). Now that the stock appears to be falling back down to that support level again, traders might be able to expect some sort of bounce. However, if the $46 support level breaks, lower prices should follow.
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The Tale of the Tape: SCTY has an important level of support at $46. Traders could enter a long position at $46 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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