RobDC

A Second Try for Evergreen Solar

Technical analysis can provide invaluable insight into human nature, the psychology of optimism and pessimism, and the impact of fear and greed on a stock price. A stock chart can show you a stock's past behavior when they beat earnings expectations, or a stock's likelihood to weather stormy macro-economic times. Without being able to read a stock's chart you are going into the game without a very valuable skill.

Common patterns have been identified. If someone knows that there is a better than 50/50 chance that a stock will rise dramatically after a "cup-and-handle" breakout on above-average volume when the general market is performing well, then that person is a fool for not utilizing that knowledge to better inform his decision-making process about exactly when, and at what price, to buy or sell.

Some investment strategies don't really need technical analysis, but for short and mid-term investments capable technical analysis can be the difference between a gain and a loss - no matter what "the fundamentals" might be saying about the company.

Looking at ESLR's chart we can pinpoint past earnings reports (which have been followed with big price shifts). We can observe that very heavy volume and a sharp rise followed the most recent announcement about contracts. We can see that ESLR was about 18$ within the past year - and with less rosy prospects. You can then surmise that since business has improved for ESLR, and contracts have been signed that will bring in revenue, that ESLR could very easily challenge those former highs around $18 if the good news continues. Technical support (a triple-bottom of sorts) at $8-9 shows that downside is apparently limited to 20% while upside could easily be 100% by year's end if ESLR keeps delivering, if the market steadies, and if the US presidential race features campaign promises for the support of alternative energy (which is likely).

Other than future dilution there is little in the way of bad news - and the dilution factor is already baked in by now. There is plenty of potential good news, though, including legislation from D.C., next month's earnings, more contracts, and the upgrades and revisions that will take into account these new long-term contracts. There is an IPO. There is ESLR's "greener" and more efficient technology. And a nice chart.