[caption id="attachment_615" align="aligncenter" width="500" caption="Evergreen Solar"][/caption]
Wrote some puts on ESLR for Dec08 at strike 5 for \$1.60. Yesterday after market, news of a judge denying Evergreen request on return of Barclays shares sent the shares tumbling today. Furthermore, the overall market is sinking on light volume since the election.
However, today's open 15min volume is about 40% lower than than the up open volume on Monday at the same price level. In other words, the panic selling isn't as that bad, although the price has dropped 12%.
Upside: Good up volume, light down volume on 15 min and daily chart for the past week and more. Broad market selloff shows positive divergence on various indicators intraday. ESLR prices retraced to about 62% of fibonacci level and bouncing back up.
Resistance: \$6, peaked at \$5.72 a couple of days ago too and congestion at that point from farther back.
Downside: Broad market selloff. Low volume rally before election. Low volume selloff after election. Just low volume all week in the market. ESLR not profitable yet. Factory done next June. Difficult to raise capital to expand production to meet backlog in these times.
Support: 20 dma at \$3.50.
Bottom line: Recent solar rally looked strong. Company outlook seems good. Profit taking retracement plus the overnight bad news together haven't broken the new uptrend yet. This will again be a bullish swing trade.
The broad market shouldn't fall to a new low prior to breaking some highs. Everyone that wants to sell has sold in the October crash already. We need some new highs and optimism to lure in new blood to be sucked on by the pros before another crash can be profitable to them.