SunEdison (SUNE) rated a below-the-fold, front-of-the-C-section story in the Wall Street Journal today. Yes, I know SUNE has had plenty of other press before today, including excellent coverage by our own Carleton English, so what is different?
There is nothing elegant about this chart of SUNE, above, but it does remind me of a number of commodities that I traded years ago. They always went down faster than they went up. SUNE plunged to under $3 recently from over $30 -- see the chart above. What's interesting about the decline is not the death cross in August, or the bullish divergence in August, September and November with the lower lows in price -- but the higher lows from the momentum study. There is the heavy volume of trading in November and December, but it is the (Donald Trump) HUGE short interest of some 119 million shares, up from 92 million in the prior report, that is really interesting.
Keeping that short interest figure in mind, look at the big move up in the On-Balance-Volume (OBV) line. Was the near vertical move up in the OBV line the past five weeks aggressive new buying, or aggressive short covering? I don't know, and I won't have a better idea until the next numbers are released, but it is interesting in my book.
This longer-term chart, above, puts the decline in a similar light. Notice the uptick in the OBV line and a bullish divergence on this timeframe, too. Not knowing the motivation of the buyers, I would be on guard for any bullish surprises or bearish news that has already been discounted. Gains into the $10 to $15 area would not be unusual. I am not interested in playing this kind of rally if it were to happen, I will leave it to others more nimble.