ESS Tech (GWH) closed below our sell-stop yesterday and isn’t bouncing today. We recommend selling.
Growth stocks are being hurt by expectations the Federal Reserve will raise interest rates, and Greentech itself has traded at a 14-month low today. Market conditions, ESS Tech violating support and the fact it is a SPAC-derived listing (meaning it probably lacks institutional support to come in and buy shares here) makes it sensible to cut our losses.
Should ESS continue to shed support, as I expect it will from here, it may present us a more opportune time to reenter the trade in a month from now either in equity or warrants. We don’t recommend shifting into ESS warrants right now because the company has the right to redeem them if shares trade above $10 for 20 of 30 days, which it can exercise right now.
Our regular update is Wednesday, January 12. Please let me know if you have any questions or comments. You can reach me at brendan@cabot.net.