Chart Of The Day: Sunpower Stock Primed For A Surge
Investing.com | Nov 11, 2021 14:31
One of the hottest pieces of financial markets news right now is the just announced agreement between the US and China to "work together to slow global warming." Though notable for a variety of reasons including that the economic superpowers are two of the world's largest polluters, for companies with a particularly green focus, this could be a potential game changer.
One business that could benefit is San Jose, California-based SunPower (NASDAQ:SPWR). After releasing Q3 results last week that disappointed markets, shares of the solar power generation and energy storage company dropped as much as 10.8%.
However, dip buyers trimmed losses to just 1.3% but the price has been approaching last week's low again, with a four-day straight decline. Will today's news provide support for the price and push it higher? The technicals provide an interesting perspective.
Despite the recent fall, the price may have already found support. The stock has been trading in a sideways direction within a potential pennant pattern.
Tuesday's trade may have formed a hammer (imperfect, with a small upper shadow). Wednesday's activity respected the hammer's bottom, showing support, which agrees with the pennant.
Moreover, the pennant has been developing precisely on the neckline of a large double bottom since April. If the pennant completes with an upside breakout, it will confirm the larger bullish pattern.
From a risk-reward perspective, it's possibly an ideal trade, considering the price is the very bottom of what may prove to be a bullish pennant.
h2 Trading Strategies/h2Conservative traders should wait for the pennant to complete, especially considering that the price is back below the double bottom's neckline. After the topside breakout, they should wait for the price to retest the pennant's support.
Moderate traders would wait for the same breakout and a return move for a closer entry, if not for confirmation.
Aggressive traders could enter a contrarian, long position (given the stock's current descent), considering the ideal risk-reward ratio. However, this is a risky trade, and a trading plan is key. Here's an example:
Trade Sample
- Entry: $30
- Stop-Loss: $29
- Risk: $1
- Target: $37
- Reward: $7
- Risk:Reward Ratio: 1:7
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.