BROADWIND ENERGY: January 29 Update
On Jan 15, 2010 I wrote:
“Broadwind shares fell by $0.50 to $5.87 today after the company priced an offering of 15 million shares of its common stock at $5.75 a share. Volume was a huge 8,118,694 shares, compared to the 50-day average daily volume of 262,000. The stock has now sold lower for 6 consecutive trading sessions and has sold off $4.05 in just 15 trading days, which certainly suggests a greatly oversold scenario. Now that it appears that all relevant press releases have been issued I expect the stock to enter a period of consolidation in the $5.60 to $6.00 range before retracing these recent losses back to the $8.00 level”
In fact Broadwind continued to sell off for 5 consecutive days, reaching a low of $5.18 this past Monday, before closing the day at $5.64. The stock has since traded up to $6.15 yesterday and today retraced some of the week’s gains to close at $5.68.
This short term chart [4 months] shows us that Broadwind is closing in on the upper band of a month long downward channel [RED lines] . It is my belief that once it breaks through this line and we get a closing price in the PLUS $6.30 level, a run up to the first resistance level at $7.00 is attainable. This is also where we presently find the 50 day moving average [GREEN line].
Further upward movement would have the stock approaching the always important 200 day moving average [solid BLUE line] at $7.75. This level would represent a 50% retracement of the selloff from the December 24 high of $9.92. Volume continues to impress as we saw 4,366,000 shares trade hands for the week, considerably higher than the 10 week average volume of 1.3 million per week.
