Here's When Enphase Energy Could Be a Buy Opportunity

The shares have made a great advance over the past 12 months.

Enphase Energy Inc. (ENPH) was upgraded to a buy by TheStreet's Quant Ratings service Wednesday. Regular readers of Kamich's Korner know that I do not mind combining investment approaches -- quantitative or even fundamental at times.

On August 28 we reviewed the charts of ENPH and recommended to take profits. The shares did correct into early September but have since soared to new heights.  

Let's check out the charts again. 

In the daily bar chart of ENPH, below, we can see that the shares have made a great advance over the past 12 months. Nearly $100 per share -- the kind of move where we wished we owned more shares. Prices are above the rising 50-day moving average line and the rising 200-day moving average line.

Trading volume has been on the light side, which is not comforting but the On-Balance-Volume (OBV) line has moved up telling us that buyers of ENPH have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal. 

 

 

In the weekly bar chart of ENPH, below, we can see a parabolic advance over the past three years. Prices are well above the rising 40-week moving average line and were briefly double the line.

 

The OBV line has not been able to move above its May high and thus has diverged from the price action. The MACD oscillator has begun to narrow. 

 

 

In this daily Point and Figure chart of ENPH, below, we can see that the software is projecting a possible decline to the $68-$67 area. 

 

Not pretty. 

 

In this weekly Point and Figure chart of ENPH, below, we can see a potential upside price target in the $225 area. 

 

 

 

Bottom-line strategy: Weakness in the broader market could drag ENPH down to key support around $80 where traders could consider a new long position.

 

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