Evergreen Solar (ESLR)

Company

ESLR 1-year chart ESLR 1-year chart

"Evergreen Solar, founded in 1994, develops, manufactures and sells solar power products, primarily solar panels, that provide reliable and environmentally clean electric power throughout the world. The three markets the Company serves are: wireless power, rural electrification and grid-connected applications. The Company expects to exploit its proprietary and patented technology to produce distinctive products, to reduce manufacturing costs through lower materials use and streamlined processes, and to manufacture internationally for global market penetration. The solar panels produced by Evergreen Solar incorporate proprietary crystalline silicon technology known as String Ribbon wafer production, which uses approximately half the silicon and avoids the sawing of conventional approaches." (company website)

(company website)

ESLR 6-month chart
ESLR 6-month chart

Buy

I banked a nice profit on ESLR in February, and I have been watching it ever since. The Market freefalls at the end of February and beginning of March brought ESLR back near the trend line, and it looks to have fully recovered.

  • Price momentum (PPO) — fell somewhat, but pointing back up again
  • Trend (ADX) — still very strong, and buying pressure (+DI) has ticked up again
  • Money flow (CMF) — just above neutral, ticking up
  • Relative strength (RSI) — increasing again after pulling back closer to neutral
  • Volume — moved up on heavy volume, which has slacked off a bit during the pullback

Based on technical analysis, MarketEdge calls ESLR a "buy" in a "strong upward trend."

Sell

gain Bottom line
29%

How sweet it is! After ESLR reached another 52-week high today, I sold. ESLR jumped 12% today, putting it 40% above its 50-day moving average. Statistically that is way, way out there, and this kind of momentum is very unlikely to be sustained. There almost certainly will be a pullback soon, and that will represent another buying opportunity.

Getting to this point hasn't been smooth. At one point, after the company issued 15-million new shares and turned in earnings that disappointed The Street, I was looking at a 25% loss. It rebounded, saving me from my despair, and then began forming a symmetrical triangle, from which it broke out in October.

I was sorely tempted to just ride along some more — after all the chart is very strong. But, with so much volatility in the market, I chose to bank the profits rather than put them at risk because of unrestrained greed.