I have been writing about renewable energy firm Enphase Energy (ENPH) for a while now on Real Money. In a recent post on November 15 I recommended that "Traders who are long ENPH from earlier recommendations should continue to hold. Raise stops to $255 from $230."
On Friday a sell-side firm rated ENPH a new "outperform" (buy) with a $335 price target, so let's pay another visit to the charts and indicators.
In this updated daily bar chart of ENPH, below, I see that the shares have recently been testing the rising 50-day moving average line but remain well above the rising 200-day line which intersects down around $240.
The On-Balance-Volume (OBV) line has been steady since early September. The Moving Average Convergence Divergence (MACD) oscillator is just slightly above the zero line telling us to watch the price action closer.
In the weekly Japanese candlestick chart of ENPH, below, I can see the past three years of bullish price action. The shares are in a longer-term advance and trade above the rising 40-week moving average line.
The weekly OBV line shows a long-term but gentle rise. The MACD oscillator is above the zero line but has made a lower high for a bearish divergence when compared to the price action. The most recent weekly candle shows a lower shadow below $300 telling me that traders have rejected those lows.
In this daily Point and Figure chart of ENPH, below, I can see that the software is projecting a potential upside price target in the $367 area or around $30 higher than the fundamental target noted above.
In this weekly Point and Figure chart of ENPH, below, the software is showing us a potential long-term target of $479. Not bad.
Bottom-line strategy: Traders who are long ENPH should continue to hold. Keep stop protection at $255 for now but if ENPH rallies above $345 stops could be raised to $285.
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