[caption id="attachment_174" align="aligncenter" width="500" caption="Evergreen Solar, Inc. "][/caption] Today's WSJ headline, "Wall Street Shakeup Rattles Markets." Lehman filed for bankruptcy and Merill sold itself to Bank of America, reportedly. VIX rose above 30 today, a recent high. The market is definitely very volatile today, but it's not down as much as people have hoped. DOW reached a low of 11087 but has been around 11190 most of the day as of now (13:07). [caption id="attachment_202" align="aligncenter" width="500" caption="DJX and CBOE Volatility Index"][/caption] Transaction fee = \$5.79 Upside: The Money Flow Index broke below 20 at 18.42. Daily Stochastic is at 10.825 and crossing over the Slow Stochastic line. MACD positive divergence (i.e. new price low, but not lowest MACD). And 18.3% of shares are shorts, as of last month. Resistance: Friday's high of \$6.30. And stronger resistance at \$7.60. Downside: New 52-week low, bear market, and oil below \$100. Support: Round number \$5.00. Bottom line: Not only is ESLR at a 52-week low, it's at a level not seen since 2005. While this may not be the bottom of current downtrend, today's capitulation (18% down on 9M of 6M avg volume) seems like a good entry point with respect to risk/reward ratio. In particular, the company itself isn't any worse than before, it's just being discounted along with other solar plays because of the market turmoil. Lastly, the price is way below it's 200 and 50-day MA with 18.3% of shares shorts. Stop: Price closing below \$5 for 3 consecutive days. Update: Will see how the price plays out this week and reevaluate my position now that the Lehman problem is known. Update: ESLR went down to \$4.47 intraday because of a share loan to Lehman (which went bankrupt today). Effectively, in a worst case scenario, ESLR would have 30 million more outstanding shares without receiving a penny. In hindsight (ESLR closed at \$4.56 with 22.8M volume), I should have researched ESLR's connection with LEH, MER, or AIG (the three financials in troubles this weekend). This boils down to inadequate due dilligenceon my part.
: http://traderpau.files.wordpress.com/2008/09/2008-09-15-eslr.png : http://traderpau.files.wordpress.com/2008/09/2008-09-15-vix1.png