China has been weighing on cleantech stocks this week, as the government there cracks down on companies that have listed stocks on a U.S. exchange. That means the worst performers in the Greentech universe are packed with mainland China solar and EV companies. That in turn has dragged down the indexes we watch as an indicator, with the Wilderhill Clean Energy index below its moving averages. Yet, even stripping out Chinese stocks, the sector has been in a slump this month and appears to be caught in a range. In some ways that’s a good sign – range-bound trading means the retracement of February to April has halted and the market is building a base for the eventual move higher. What the market needs now are catalysts to spur bulls into buying. Announcements that there is bipartisan deal on infrastructure out midday today probably will help sentiment, but the details will matter on which stocks stand to benefit. We remain largely in cash and continue to believe patience and smart entries into new positions will benefit the portfolio in the weeks ahead. Real Money Portfolio Ameresco (AMRC) The main variable right now is that the company reports its second quarter earnings Monday after the market closes. Consensus expectations are for net income of 26 cents per share on sales of $259 million. While shares of the renewable energy installer and operator are generally in good shape, the stance of the market and general tepid reaction to good earnings we’ve seen the past quarter means it’s best to wait and see how the market reacts. If the reaction is bullish, then we have a confirmation that we should enter shares, if neutral or bearish, then it presents an opportunity to buy into shares at a better price. WATCH Aptiv (APTV) The 160 level is clear resistance for shares, with shares contained in a 30-point range right now. A breakout above 160 is our clear objective here – with the market’s mixed conditions, we want a confirmation of a bullish move and not to act on anticipation. The company reports earnings before the market opens on Thursday, August 5. Expectations are for 67 cents earnings per share on sales of $3.6 billion. A firm breakout over 160 would normally be a signal to buy, but with earnings so close and the market mixed, the wiser move may be to wait for the report and investor reaction. WATCH Chipotle Mexican Grill (CMG) Chipotle is holding its gains from a great earnings report very nicely and we’re up about 3% in the week we’ve held shares. We bought just under 1,774 with a very loose sell-stop on the ethical quick-serve restaurant chain around 1,467. Let’s raise that to around 1,587, a mark that would close the gap created after earnings were reported and signal a break in gap support. That’s still loose, so the more conservative trader could set a stop around 1,625, which would be a level beyond normal volatility and below multiple levels of support converging around 1,650. We remain bullish on shares and charts signal good upside from here. BUY General Motors (GM) The EPA is proposing rules that will increase the fuel standards for vehicles beyond the prior Obama- and existing California-levels with the goal of pushing the U.S. market to about 40% EVs by the end of the decade. GM has pledged to go all-electric so higher standards should help keep the automaker focused on following through with EV plans. GM reports earnings next Wednesday before the market opens and holds its conference call with analysts during trading. Reading the tea leaves of earnings announcement timing, that’s likely bullish. Estimates are for $2.23 EPS and revenue of $30.9 billion. GM trades at well less than 1 times annual sales. The chart is neutral, but we may pull the trigger on adding shares ahead of earning, provided initial support around 51.50 holds. WATCH Steel Dynamics (STLD) Shares are around our buy price, basically at the point they started from a week ago after the company reported better-than-expected earnings. Management didn’t offer up specific estimates on forward earnings or sales, but they were quite positive on demand trends. It’s been a quiet news week since. HOLD Stem Inc. (STEM) The energy storage company will report earnings on August 11, after the close of trading. The company will probably report a loss of 11 cents on sales of $18-$19 million. The outlook is the primary driver here–utility-scale energy storage is expected to be a high-growth business. Most likely, we’ll need to wait for earnings to be a catalyst here. Shares are in the mid-20s with resistance at the major moving averages sitting up in the low 30s. Much of the move lower has come on light volume. WATCH Trex (TREX) Earnings are announced Monday after the close, with Wall Street expecting 53 cents EPS and $302 million in revenue. Trex got no bounce from prior earnings, even though they were positive. We’re close to our sell-stop of “near 93.” The 94 level is a clear near-term support, with the 200-day moving average next at 91.73. The temptation is to loosen the stop ahead of earnings, but shares have already cracked a support line and violating another will be a sign to cut our losses and live to profit another day. HOLD Excelsior Portfolio Our rating remains BUY on each of our SPACs, preferably as a basket of even positions. We have no sell-stops. Li-Cycle / Peridot SPAC (PDAC warrant) Peridot shareholders will vote on the Li-Cycle merger on August 4 with results coming on August 5. The company just hired a head of Asia operations away from leading the global battery business of much larger Albemarle (ALB). China will be an important market for lithium battery recycling. Shares and warrants are weaker from last week, likely from arbitrage traders exiting the SPAC ahead of the merger, which is typical action. Navitas Semiconductor / Live Oak II SPAC (LOKB) Shares and warrants are up slightly this week, continuing normal range-bound trading with no news to spur action. Origin Materials (ORGN) Shares have slid about 50 cents from last week, to around 6.21, yet our warrants remain around 1.41, which implies the carbon-negative plastics maker should have shares at 13. The difference is likely Origin Materials needing to find new equity investors after SPAC arbitrage traders have sold out. Raymond James just began coverage with a “market perform” rating. Institutional coverage will help generate investor awareness which should benefit Origin. Ree (REE) The merger with 10X Capital SPAC was completed and the stock ticker changed from VCVC Friday, to REE for the stock and, for our warrants REEAW. The company announced it will open its U.S. headquarters in Austin, Texas. Shares spiked to 11.66 on Monday and have tumbled to 9.50 today. Similarly, our warrants hit 2 the same day but have backed down to around 1.50 midday Wednesday. As with our other SPAC warrant holdings, day-to-day volatility is largely unimportant as we wait for the longer-term trade to play out. ReNew Power / RMG II SPAC (RMGB) Shares and warrants are basically unchanged from last week. Brokerage Roth Capital initiated coverage on the company yesterday with a price target of 17 a share, implying our warrants are worth 5.50, although they trade at 1.45 now. ReNew is a large owner and operator of renewable energy facilities throughout India. Volta Charging / Tortoise 2 SPAC (SNPR) Little news besides fresh installations of Volta EV chargers around the country. Shares and warrants are unchanged from last week. Thank you for being a subscriber. Contact me anytime with questions or comments at brendan@cabot.net. The next issue of SX Greentech Advisor is out Wednesday August 4. We’ll alert you with any buy or sell alerts as needed before then.