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9 Takeaways From SolarCity Corp's Chart

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This solar energy stock is largely outperforming the broader market, but analysts have yet to climb on board -- three out of four maintain "hold" ratings on SCTY.

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The below chart is of SolarCity Corp (NASDAQ:SCTY), which engages in the design, installation, and sale or lease of solar energy systems to residential and commercial customers, and government entities in the United States.


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Recommendation: Long

What I Am Looking At:
  • Largely outperforming the broader market, up more than 214% year-to-date.
  • Recent pullback to the rising 40-day moving average, which has been significant during the past year.
  • Coinciding with the 40-day moving average is the 200% year-to-date level, which could be supportive.
  • Pullback has retraced between 38.2% and 50% of the all-time low to the all-time high.
  • Enormous put open interest for the June/July series at the 35-strike could create a tailwind on an unwind situation.
  • Short interest continues to rise, up nearly 25% during the past two weeks and represents 14% of the float; bounce from here could spark short-covering.
  • Analysts have yet to climb on board as three out of four maintain "hold" ratings.
  • Annual sales growth for the past five years is 41%.
  • Long-term annual growth estimate (five years): 33%.
Strategy: Looking for the 40-day moving average and the $35 level to hold with the anticipation of a possible move back to the May highs.

This article by Tony Venosa, CMT, was originally published on Schaeffer's Investment Research.

Below, find some more great content from Schaeffer's Investment Research:


Daily Game Plan – Top of the Range

Study of the Week: Is a Lot of Volatility Bullish?

Trading 101: A Look at the Recent Tape

Twitter: @schaeffers
No positions in stocks mentioned.
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