Fan Yang
All posts from Fan Yang
Fan Yang in Fan Yang,

SolarCity (SCTY) challenging the lows on the year again

SolarCity (SCTY) has been sliding consistently in August. It seems like the market is not impressed with the SolarCity-Tesla (TLSA) merger. SCTY is now trading near the low on the year, in the 16-16.50 area. 

SCTY Daily Chart 9/13

(click to enlarge)

Lower highs still in play:
- As we can see in the daily chart, SCTY was bearish entering the year. 
- Price did find support in the 16-16.50 area twice, once in February then again in May. 
- However, the significant highs are still getting lower, reminding us that SCTY is still bearish, or at best neutral-bearish with emphasis on the bearish component. 

Key support:
- As mentioned above, the 16.00-16.50 area is a critical support that contains the low on the year.
- This week, price came down to about 17.00, and found support Monday (9/12). 
- As we get ready for the 9/13 session, the question is whether the support will hold.

Buying at support:
- Because the prevailing trend is bearish, I would not buy from this support area, unless it gets real close to 16.00 and stalls. If I am going risk going against the prevailing trend, I would at least want great reward to risk.
- A break below 16.00 would be a sign that bears are in charge. 
- But if price can hold above 16.00, there is a short-term upside risk back towards 20.00. Even if I risk buying around around 16.00, I would limit the bullish outlook to 20.00.