Greentech is in a zone of support. While it has declined about 14% in the past two weeks, which is discouraging, we’re seeing buying coming in at current levels, where, technically, is an area we want to see bulls pushing back. Overall, the Greentech Timer is telling us to be cautious – it’s below all three of the moving averages we watch and on Friday, trading broke support from an earlier gap higher. The area of real concern for our sector would come with another 10% decline from today’s levels.
Standing alone, it appears Greentech bears aren’t inclined to push much farther from here. But we have to view things in the context of the broader market, which is in worse shape than our sector. The S&P 500 and Nasdaq 100 have touched 22-month lows on an intraday basis this week, but, as a positive, are holding support lines right now on the weekly chart. The NYSE Composite shows a bit worse, but it too is on top of support formed in November 2020. In short, where the markets go in the immediate future could be significant: a break of multi-year support or a bounce higher that tells us there’s a real floor beneath equities at these levels.
There are no trades, with a couple of tweaks to our recommendations, below.
Real Money Portfolio
Clean Earth Acquisitions Corp. Shares, Warrants and Rights (CLIN, CLINW, CLINR)
The SPAC remains searching for a merger, which is a normally quiet period. Our rights are up three cents this week to 18 cents, the warrants basically unchanged. HOLD
Clearway Energy (CWEN/A)
Clearway is in its eighth straight down day today, which means we should see a bounce higher soon. The company has been hurt by problems at its El Segundo Energy Center, which is a natural gas power plant it owns (conventional makes up about 1/3 of Clearway’s energy assets). That will cost it some $12 million in cash this quarter between lost revenue and repairs. Technically, the support we want to see held is around 28.50, near our sell-stop of “around 28.” Shares now have resistance around 31.60 and 34. HOLD
Energy Recovery (ERII)
ERII is in a downswing, but technically looks fine and we should see shares turn higher again soon. Around the high 23 mark today, ERII is on top of 40-day support and has support down into 22. BUY
Enovix (ENVX)
Bears have eaten into a support zone for shares but it’s largely intact and ENVX would need to fall to 16.33 to break. The major resistance we want to see broken is at 25-26. We’re shifting our rating from “Buy” to “Hold” given market conditions. HOLD
Enphase Energy (ENPH)
Enphase shares are holding up fine, with good initial support below us at 268-255. Resistance is at 295, 302 and 320. No news. BUY
Growth for Good Shares, Warrants, Rights (GFGD, GFGDW, GFGDR)
The SPAC remains searching for a merger, which is a normally quiet period. Little change in the prices of our securities over the past week, which is also normal. HOLD
Li Auto (LI)
China extended its EV tax exemption into 2023, helping Li this week. It’s also boosted by its announcement it will sell its new EV, the L8, starting Friday, earlier than expected. However, Li also said supply chain issues will clip third-quarter deliveries to 25,000 from a previously expected 27,000. For shares, 27-29 is resistance that could be significant, support should kick in starting at 23. HOLD
Montauk Renewables (MNTK)
MNTK is holding initial support levels in the 17-18 zone well, suggesting the doji formation that concerned us last week is a sign of indecision rather than a reversal. A close over 18.50 would be bullish. No news. HOLD
Onsemi (ON)
Onsemi is expanding its silicon carbide plant in the Czech Republic, signifying good demand expectations. Broader growth stock worries have been affecting ON, rather than anything specific to the stock. Support is at 61-60; resistance is at 67-68. HOLD
Ormat Technologies (ORA)
ORA has turned a bit bearish, falling below its recent range. Resistance will return at 92-97. We’re on support today at 88; our sell-stop remains around 83.50. Given the recent weakness, we’re switching our recommendation from “Buy” to “Hold.” HOLD
Shoals Technologies (SHLS)
SHLS looks fine, only making a modest test of support at 19 this past week. The area around 24 will be a bit tough to crack right now. WATCH
Sunrun (RUN)
RUN is on top of support from 29-26, and resistance is at 34. Given market conditions, we’re still reluctant to enter a position just yet. WATCH
Vertex Energy (VTNR)
VTNR is bouncing a little as conventional energy prices tighten with Hurricane Ian, and a move toward resistance points between 7 and 9 could be coming. A stronger rebound in Vertex will take time, starting with Q3 results, which won’t be reported until early November. We could consider cutting our losses here ahead of time. HOLD
Excelsior Portfolio
ADS-Tec Energy (ADSEW)
Warrants are fine, basically unchanged over the week. The CEO of ADS-Tec has been nominated for the Deutscher Zukunftspreis, the German President’s Prize for Technology and Innovation. The honor is for the company’s ChargeBox design, which is the basis of its superfast EV charger that doesn’t need electrical line upgrades (it charges an internal battery from the common, low-voltage electrical lines, and the battery provides ultra-fast EV charging). Eventually, ADS-Tec’s “better mousetrap” of an EV charger will catch investors’ attention. HOLD
Constellation Energy (CEG)
CEG looks great, holding over support while consolidating, with price action hinting that shares will start turning higher again. The company opened its Oswego, NY, nuclear-to clean-hydrogen demonstration facility, with production of green hydrogen to start by year’s end. Our sell stop is “around 77,” well below a support zone while leaving us a decent profit. HOLD
ESS Technology (GWH.WS)
The warrants are a little weaker over the week, at 71 cents, from 77 cents. Given this trade is to take advantage of the conversion ratio of warrants to shares – like with the Altus Power warrant trade we closed at a 190% profit – we’re keeping our recommendation at “Hold,” unless warrants ease back into the 50-cents area. HOLD
FuelCell Energy (FCEL)
FCEL continues to drift lower, hurt by a lack of firm sales guidance for the current quarter. Significant resistance is at 4.72. This is a half-sized position. HOLD
Origin Materials (ORGNW)
Origin warrants are about the same as last week. It is likely we may not see much movement until the operational commencement of its first carbon-negative plastics plant, on schedule for the end of the year. HOLD
Ree Automotive (REEAW)
The warrants-to-share conversion offer expired on September 22. As recommended, we converted our warrants to shares at the rate of five warrants to one share. Management is now going to convert remaining warrants to shares at a less favorable rate of 0.18 share per warrant. Holding shares of Ree doesn’t improve our trade right now, but in the longer run, cleaning up the balance sheet by eliminating warrants should be a positive, since warrant accounting can wildly distort quarterly results. Still, Ree has long been the laggard of our June 2021 SPAC warrant basket trade and we expect continuing weakness until a firm sign of production comes. HOLD
ReNew Energy Global (RNWWW)
Warrants are weaker at 1.08, down from 1.30 last week. HOLD
Volta Inc (VLTA.WS)
Warrants are weaker at 45 cents, from 60 cents last week. The company will sell $150 million in equity through a deal with Cantor Fitzgerald. It’s dilutive and explains some of the weakness, but in the longer run, raising capital does improve the EV charger maker’s balance sheet, which is a positive. HOLD
Our next SX Greentech Advisor issue is published Wednesday, October 5. Weekly updates are published every non-issue Wednesday, and any timely notices get distributed as needed. Get in touch with comments, suggestions and questions any time. Reach me at brendan@cabotwealth.com. Thank you for subscribing.