We’re close to seeing two sell-stops triggered at the end of today – Aptiv and Steel Dynamics – and we’re moving one stock, Ameresco, from Watch to Buy with today’s update. Read on for more details. The broad market is looking fine, though there are some signs we could see some pullback here – stock rotation indicators show utilities are the only sector showing improving momentum and relative strength, which suggests some defense is being played by institutional investors. Still, in the S&P index only energy – which is all fossil fuel stocks in that index – is really performing poorly. Everything else is mixed. The situation is a bit the same for Greentech – mainly some positives to be encouraged by and some negatives to keep in view. The positives are that Greentech continues to give the look of a sector where bears are tiring. Downtrend lines continue to flatten out and the major Greentech indexes show improvement – the Nasdaq Clean Edge Index, which is heavily weighted in a handful of names like Tesla (TSLA) and Albemarle (ALB), the solar-focused MAC Global Solar Energy Index and the one we watch more closely, the more broad-based Wilderhill Clean Energy Index, are all over the 20- and 40-day moving averages. The negatives are that for each their short-term moving averages are trending lower and the important 200-day moving average sits overhead as resistance. Only water stocks remain quite bullish, though all are easing back to support today. All in all, our recommendation is much the same as it has been: be selective in entries, wait for confirmation of bullish moves and keep track of sell-stops. As usual, we’ve adjusted a number of our sell-stops in the portfolio this week. Real Money Portfolio Aemetis (AMTX) The company got permits to build five more biodigesters in Stanislaus County, California. They will feed methane from area dairy farms to the company’s renewable natural gas facility, which already has two biodigesters online. Execution is what we want to see from the company. The shares advanced nicely this past week. Shares give the looks of easing off of 12 in a temporary retracement. We’re considering entering closer to support at 11.08. WATCH Ameresco (AMRC) AMRC finally broke through resistance at 69 that has held it back. Shares are backing off the new high just over 72 today, but buying has been better than selling – that is, the move off Tuesday’s highs came on light volume, while the advances came on good buying. The company was awarded a Navy contract that should add about $50 million a year in revenue, a 5% annual bump, for the coming five years as it improves energy efficiency at the Portsmouth, NH and Norfolk, VA yards. We like the business model, as detailed in our July 21 Greentech issue. Now that the stock checks all our technical boxes, we’re going to recommend buying here, as shares pull back toward initial support around 68. We’ll start with a sell-stop of 63, although we expect support to prop up shares in the low 66 region. Our upside is into the 90s, based on classical chart formations, giving us a 3-to-1 reward to risk ratio. BUY Aptiv (APTV) Aptiv is testing our sell-stop of ‘around 147’ today. We’re going to lower that to ‘near 145’ on a closing basis, since 145.82 is the 200-day moving average and we should see support come in. It does seem the trade is moving against us and we should be prepared to execute on the violation of the 200-day. There’s been little news. HOLD Chipotle Mexican Grill (CMG) Shares are consolidating around 1,900 and look positive. We’re raising our sell-stop to around 1,825 from ‘around 1,790’ to lock in more profits to the downside. BUY Enphase Energy (ENPH) The portfolio bought at a price of 178.36, the mid-point between last Wednesday’s high and low. Shares have backed down to test support at the 200-day moving average of 165. Our recommended sell-stop of around 161 sits below, at a level that would suggest the violation of support is significant. On the minute charts the past week, buying shows more volume than the sell-downs, which are happening on lighter volume. Enphase can still be bought here, with a sell-stop of near 151. BUY First Trust Water ETF (FIW) Water stocks remain the leader in Greentech although they have eased off the past few days as the ETF became a touch overbought. We’re raising the sell-stop this week to near 88, below 40-day support at 88.13, from ‘near 86.50.’ BUY KraneShares China Clean Tech ETF (KGRN) The China-focused ETF is down sharply today but still above support and not really threatening support levels right now. We’re keeping our stop-loss to around 43.25. BUY Onsemi (ON) Shares have bounced off 46 again in recent days, clearly a new level of resistance for the semiconductor maker. The move down has done little damage technically – we’re still over the moving averages and above what should be excellent support at a chart gap from 41 down to 39.50. Our sell-stop ‘around 39-40’ remains. BUY Steel Dynamics (STLD) STLD right now looks to trigger our sell-stop of ‘around 66’ as bears push shares below the 40-day moving average. Volume is light, but we’re recommending sticking with our sell-stop and selling if shares close below 66 today, holding otherwise. HOLD Trex (TREX) Trex has retreated from its breakout, but remains over support on little news. We’re maintaining our sell-stop of ‘around 102.’ HOLD Excelsior Portfolio Our special opportunities portfolio right now consists of warrants in six companies that have come public by SPAC. Our horizon here is longer term, as it needs to be with SPACs, since the companies suffer from cycles of investors exiting – IPO investors exit on the deal announcement, investors at the deal announcement who provide PIPE financing often exit at the close of the merger, and then shares need some time to find their feet as new, longer-term investors come in. Our rating remains BUY on the six as a basket. We have no sell-stops. Li-Cycle (LICY warrant) Li-Cycle will announce its third-quarter earnings tomorrow before the market opens. There are just two analysts on Wall Street following the business. They expect a loss of $2.42 a share. The outlook is really what’s important. Little change on the warrant price the past week. Navitas Semiconductor / Live Oak II SPAC (LOKB warrant) Warrants are stronger this week, but nothing exceptional. This is the last of our SPAC warrant purchases that has yet to complete its merger. The company has a redemption backstop deal with an eco-focused fund, Encompass Partners. That implies the deal will happen, but signals concern shareholders will redeem a larger number of shares for SPAC IPO capital rather than holding through the merger. That tells us to expect weakness around the deal closure, which is still to be determined. Origin Materials (ORGN warrant) Little news for the maker of carbon negative plastics. The warrants are a little weaker this week, but nothing out of the ordinary. Ree Automotive (REE warrant) Ree shares and warrants are weaker, but in a positive development the SPAC sponsors, 10X Capital, announced today its CEO has bought $2 million of shares in the open market. Typically, SPAC sponsors are content to take profits when a merger closes, rather than back the business. ReNew Power (RNW warrant) The warrants of the India renewable power developer and operator have had a volatile week, running up to 1.79 from a low of 1.30 on little news. They’re at 1.50 today. Volta Charging (VLTA warrant) Volta announced it will provide EV charging stations at Six Flags parks throughout the U.S. Terms weren’t disclosed, but shares and our warrants, at 1.90 recently, moved positively on the news. 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, September 15.
