Greentech managed last week’s market downturn well, with a huge-volume day Friday that left the index we watch most closely, the Wilderhill Clean Energy, with a spinning top doji. That’s a day where the opening and closing prices end the same – or essentially the same – in the middle of the intraday high and low range. All we really need to know is that it signals indecision in the market – neither the bulls nor bears could push prices. The sector is also caught in a range between support and resistance, that essentially has us waiting for a major move to signal sentiment we can reliably trade on. There are signs we may be getting there – in the two-and-a-half sessions this week, we’ve seen support hold and prices push a little higher. We still want to see Greentech take a step forward to regain its 200-day moving average before we buy again. Just a clarification on our portfolio sell-stops: they’re meant to be triggered on the closing price, rather than intraday. To us, the closing price is the most important price of the day, with 40% of trading occurring in the last half hour (based on NYSE data), and about 20% of all trades happening right at the end of the day. So, ideally sell-stops are based on a day’s closing price and executed the next day. That’s not always practical, since standing sell-stops are often triggered by brokers on intraday pricing. In practice, we’ve found it’s generally better to have an automatic sell-stop to avoid severe down days. A compromise, then, is to have the automatic sell-stop set some level a little lower, where it’s likely the closing price will be below our sell-stop. Now onto our portfolios: Greentech Real Money Portfolio Chara Solutions (CHRA) The coal ash remediator fell below near-term support last week but appears to have found a bottom around the 5.45 area. Our sell-stop is recommended near 5.25. That could be loosened a touch toward 5.10. There’s been no news, other than the CEO buying about 6,000 shares around 5.95 and dominant shareholder, BCP Energy, selling about 40,000 shares at 5.50. BCP’s sales are a mixed bag: Wall Street would like to see more liquidity in CHRA and so view the selling as largely benign, but BCP hasn’t indicated how much of its stake it wishes to sell. HOLD KraneShares Global Carbon (KRBN) A nice advance this week in the carbon emissions futures ETF has us up about 6% on the position today. Fund inflows have perked up this month while chatter about the influence of third-party investors like ETFs in carbon futures has eased, both welcome developments for the position. We’re going to raise our sell-stop here to near 34.23, the portfolio’s buy price, from “not over 32.95.” The 20- and 40-day moving averages should provide support just above our buy price and should prevent us from taking a loss if the trade turns. More support should be found around 33.37 if you want a looser stop. Chart-wise, the move this week means we still see upside to be taken and so we’re maintaining our recommendation. BUY Steel Dynamics (STLD) The environmentally preferable rolled steel producer had a sharp down week last week but didn’t trigger our sell stop, which is near 57.50 on a closing basis. Shares are rebounding nicely this week and we’re slightly in the black this morning, having entered the position at 61.13. Management provided second-quarter earnings guidance last week of $3.26 to $3.30 a share, which would be sharply up from $2.03 a share in last year’s second quarter. Demand is strong enough; the company said the third quarter could be even stronger. Shares will pay a 26-cents dividend for shareholders of record on June 30. Technically, shares are ok, with a mix of bullish and bearish signals. We’re maintaining the sell-stop and our rating. HOLD Trex (TREX) Shares are looking generally positive again, taking some good steps technically in recent sessions, including reestablishing themselves over 100, which is where there has been mild chart resistance that is now mild support. Getting to 105 is the next area of resistance we want to see taken. News has been quiet. The lumber futures market has eased off of the record highs it had seen. That removes some incentive for homebuilders to switch to Trex, but it’s not a major move – Trex primarily caters to homeowners who prefer to pay a premium for its recycled plastic and wood dust composite board to save on maintenance costs. We’re maintaining our sell-stop near 93 and our recommendation. BUY Excelsior Portfolio We opened our special opportunities portfolio with last week’s issue of Greentech. The portfolio purchased a basket of six SPAC warrants. The buy recommendation remains on all. There are no standing sell-stops for the SPAC warrants. Li-Cycle / Peridot SPAC (PDAC) The lithium-ion battery recycler is waiting for the SEC to review its proxy and should close its merger with Peridot soon, according to a podcast interview Li-Cycle co-founder Ajay Kochhar gave this week. The portfolio bought warrants at 2.42 and we’re breakeven midday Wednesday. Navitas Semiconductor / Live Oak 2 SPAC (LOKB) In an investor presentation this week management said next year’s revenue should be $69 million, up from a firm $27 million this year. 2023 sales are projected to be around $158 million. A top-line $680 million “pipeline” the company floats consists of $100 million “committed to use” or “committed to ramp with production with Nativas GaN quite soon,” Navitas CEO Gene Sheridan said, according to a transcript filed with the SEC. The remaining $580 million is for much more vague “qualified opportunities.” The portfolio entered the warrants at 2.56, they’re trading around 2.35 midday today. Origin Materials / Artius SPAC (AACQ) Artius shareholders vote today to close the merger with Origin Materials. If that occurs, as expected, the company will begin trading Friday under the tickers ORGN for the shares and ORGNW for the warrants. The portfolio bought the warrants at 2.42 and they’re at 2.15 today. The warrants face their first potential exercise starting August 10, 30 trading days from the effective close of the merger, if shares have been trading at 10 or above. Ree / 10X Capital SPAC (VCVC) The portfolio entered Ree warrants at 1.80; they are trading at 1.70 midday Wednesday. The company released Ree’s financials in a filing and, as expected, they’re below $1 million annually, befitting a development stage company. ReNew Power (RMGB) NTPC, which provides 17% of India’s largest power and is a state-owned entity, raised its renewable energy target to 60 gigawatts, from 32 GW. NTPC, along with another state-owned energy provider, is 49% of ReNew’s customer base (the division among the two isn’t yet disclosed), so the increase should direct more business to ReNew eventually. There’s been no news this week from RMG II, the SPAC which is taking ReNew public. The portfolio entered RMGB warrants at 1.81. They’re at 1.78 Wednesday mid-morning. Volta Charging / Tortoise 2 SPAC (SNPR) Volta is the largest network of chargers by revenue in the U.S. But it’s also a display advertising play, given the company says its edge is being able to deliver eyeballs that generate sales at nearby retailers. In its Investor Day presentation last week, management says it has 2,404 screens on 1,267 chargers contracted to add to its 3,584/1,377 already installed, as well as agreements with large retailers, including supermarket owner Ahold Delhaize, to be able to negotiate some 20,000 more screens and 10,000 more chargers in major metro areas. We feel management overstated its competitive moat at the event when they say their agreements allowing them negotiation for more chargers with retailers means competitors can’t catch up, because the groundwork negotiations with retailers take so long (our take: they’ll take less time when landlords see lack of EV charging hurting business). Still, we like the business model and the fact they make revenue today. Management also said it’s gearing up to enter Europe.
