BROADWIND ENERGY UPDATE
In an article I posted on December 29, a mere 11 trading days ago, I stated:
“I do warn that as the stock [Broadwind]closed near the lows of the day this selling may persist through tomorrow and perhaps Wednesday and I do believe any further downward pressure will meet great buying support in the $8.25 to $8.50 levels. I once more heartily suggest these levels present a tremendous buying opportunity before Broadwind resumes the upward trend begun on November 3.”
*** Today, the company issued two press releases that have contributed to heavy selling as it sold off $0.76 and closed at $6.37.
As you can see by the chart my December 29 conclusions were based on the great support level at $8.00 which also represented the 200 day moving average,[blue line] a usually strong level of support and also an additional support line [red line] running up from the November 3 low at $5.00 and intersecting the 200 day moving average on December 29 at $8.00 where I declared this to be a strong level of support.
Unfortunately, when strong support levels are broken the resulting sell-off can be steep and that is exactly what has occurred with Broadwind. I have written often of the difficulty in attempting to pick exact bottoms and tops in the markets and this is a case in point. I would however look to the first long term level of support as shown on the chart [green line] connecting bottoms beginning on October, 2008 at $4.80 to $5.00.
I have also connected tops and bottoms beginning on July 7 and represented by an orange parallel line channel which indicates resistance at $9.75 and secondary support at $4.00.
Today’s volume [1,058.793] was significantly higher than normal and the stock closed at $6.37 near the lows of the day, both indicating the potential for further selling tomorrow..
