Geothermal energy producer Ormat Technologies (ORA) closed Friday at 86.54, above our target for a breakout. We are shifting the stock from ‘Watch’ to ‘Buy’ for Monday.
The catalyst is a federal spending agreement called the Inflation Reduction Act that would be the largest Greentech spending bill ever passed by the U.S. government. Renewable energy is deflationary because it gets cheaper over time.
Ormat’s breakout signals it should post gains; however, this purchase is risky. That’s because the inflation bill isn’t done yet despite Senator Joe Manchin’s approval – there is a chance Arizona Senator Kyrsten Sinema may object, and the political maneuvering to get the bill to pass without subjecting it to the filibuster could also torpedo its prospects and whipsaw the market and the stock.
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