Back from the abyss


Back in March, Evergreen Solar (ESLR) was trending up, coming off a bottom in early January. It looked like the trend was pretty well established, so I bought in.

ESLR 1-year chart ESLR 1-year chart

In April, ESLR reached a new 52-week high and began what looked like a normal correction. Then, just when it seemed it couldn't get much worse, the company offered 15 million new shares priced well below the prevailing price. Of course the price dropped while the market absorbed all these new shares. I hung on valiantly, convinced that ESLR had to come back. And it did.

ESLR 6-month chart

By July, ESLR had gotten back up to where I had purchased my shares, and I heaved a big sigh of relief — prematurely, as it turned out. Bam! The price was driven back down even with the previous reversal point. Would it happen again? And it did. The price rose, but not quite as much. The price fell, but not quite as much, and I began to see the makings of a symmetrical triangle. Would it break to the upside, or go crashing down? ESLR did break up.

This morning I was delighted to see that my stake in ESLR had turned from a loss to a gain, with the stock up over $1. What happened?

After the close yesterday, ESLR reported earnings, surprising the market with a 2¢ narrower loss than expected.

This is one case where "buy and hold" turned out to be a good thing. Now, will some of the other underperformers in my portfolio do the same thing? One can only hope.