brk,
ESPD has been in an extended uptrend which has rallied impressively through all the moving averages. The situation is not unlike that of RSAS. There are early technical sell signals, and the stock is overdue for a breather here. However, with ESPD, it looks to me like you are a bit early on a short entry also.
askresearch.com
The major problem I have with shorting ESPD is that it successfully tested the 200 day ema. However, this has not been confirmed yet. Confirmation would consist of the stock retracing back to the 200 day, then bouncing off it to continue the uptrend. As soon as the previous peak is taken out, then the uptrend has been confirmed IMHO.
An alternative scenario is also possible, and for your sake I hope this is how it works out. Sometimes with a breakout you get a head fake rally, then the stock fails again. So, in this case, if the stock started to correct, then failed at the 200 day ema on strong volume with a bearish candle and sell signals technically, that would be most consistent with a continued failure, and at that point would be shortable IMHO.
Note that there is a downward trendline established from September to early January along the peaks. ESPD has broken out above this trendline of course, but I mention this because this trendline should also offer decent support if ESPD fails here, and this is a point I would look to cover a short position. The stock would be trading at roughly 15 or 16 there, and that would also translate into approximately 50% profit. This is about as much as you can ever hope for realistically from a short position, so if it could trade down into this region, I would be more than happy to cover there.
All JMVHO, as always.....
Walkingshadow |
