It remains a very weak market, and there are plenty of reasons to remain skeptical of near-term improvement. We’re still under the moving averages and the bearish trendline from November’s peak. Greentech and the broader technology sector (the Nasdaq 100) are both sitting just over areas of technical support that would probably signal a fresh round of sharp sell-offs if breached. For Greentech, a 10% drop here would test the pre-pandemic, nine-year high. But there isn’t a lot of pent-up selling volume from that period – the past two years have seen much higher trading volume – so its effect may be muted. For tech generally, however, a 10% drop here would break through what is probably more significant support from autumn 2020’s action – and tech’s trend will likely dictate action in Greentech.
All that said, I’m not as bearish as others in interpreting recent action. It is possible we saw the markets bottom in mid-June. We’re now more than three weeks of trading action above the June low. Volume is declining, but is that because of a lack of buying conviction or a lack of selling conviction? Relative rotation – an interpretation of where the market is shifting money in and out – shows that technology has been in a multi-week improvement that suggests further gains ahead. A 10% gain from current levels would break a few layers of resistance and signal a solid change in sentiment. For now, however, we remain largely on the sidelines.
Clean Earth Acquisitions Corp. Shares, Warrants and Rights (CLIN, CLINW, CLINR)
Our cleantech SPAC remains on the hunt. The trade is profitable as long as we see through the SPAC merger process. Shares are trading at a 2.6% discount to their trust value, while warrants are remarkably weak at 9 cents each, and rights at 15 cents. HOLD
Clearway Energy (CWEN/A)
Clearway remains in a trading range, sitting on top of moving average support at 31 today with light volume this week. The company will report earnings on August 2. HOLD
Growth for Good Shares, Warrants, Rights (GFGD, GFGDW, GFGDR)
Our ESG SPAC remains on the hunt. The trade is profitable as long as we see through the SPAC merger process. Shares are trading at a 2.7% discount to trust value today; warrants also at a very weak 9 cents, reflective of the broad SPAC market. Rights are at 13 cents. HOLD
Montauk Renewables (MNTK)
Shares did bounce off 9, as we wanted to see last week, though at 10 they remain below resistance. As conventional energy prices ease, the renewable natural gas is giving mixed signals, suggesting shares may not have momentum to push higher. WATCH
Natural Grocers by Vitamin Cottage (NGVC)
NGVC continues to be squeezed between resistance at 16.79, which bulls failed to break Tuesday, and support at 15.74. In a bear market, we don’t want to trade on anticipation of bullish breakouts, but right now the organic grocery chain seems more inclined to break higher than lower. WATCH
Vertex Energy (VTNR)
The renewable diesel maker is holding up relatively very well, with support down to 9 here, although there is resistance to get back to our buy price at 13.88 too. We’re changing our recommendation to “hold” from “buy” based on general market conditions. HOLD
Excelsior Portfolio
ADS-TEC Energy (ADSEW)
The EV charger maker named a new CFO, Wolfgang Breme, a German who was previously head of a privately held supercapacitor maker. The former CFO stays on as Chief Accounting Officer. The business hasn’t announced its next quarterly earnings release, but it should happen in the next two to three weeks. Warrants are a bit firmer this week at a recent 71 cents. HOLD
Altus Power (AMPS/WS)
Altus shares had a couple of brokerages initiate coverage this week with price targets of 10. Should we hit that target soon – say by year end – it would mean a quite profitable return, with warrants worth around 2.50 each in a potential conversion the company can demand at 10 or higher. Shares are at 6.64 recently. Our warrants are stronger this week at 1.48, about 40% in the black. HOLD
Constellation Energy (CEG)
The company signed a deal with a third party to use drones for energy facility inspections – it’s the new trend, rather than using low-flying helicopter inspections, which have the danger of hitting powerlines with people aboard. It means nothing for the stock. Shares are holding up fine, in a zone of support. HOLD
ESS Technology (GWH.WS)
The iron-flow battery maker remains weak – earnings will be announced August 11, which will be an important catalyst for shares. The main goal there: revenue recognition on installed units in San Diego. Financially, the company is in decent shape, so the low share price isn’t a major concern right now. Warrants remain risky, but at 39 cents recently, they would pay off handsomely if ESS shares can push back over 10 in the next four years. Given our investment thesis remains intact, our rating remains at Buy. BUY
FuelCell Energy (FCEL)
A couple of modest setbacks from delays at the Navy sub base in Connecticut and at Toyota’s Port of Long Beach project resulted in FuelCell amending two contracts to allow more time to complete both projects. Chart-wise, FCEL is starting to turn bullish, forming a rising triangle pattern that suggests a break higher could happen in the next few sessions. HOLD
Origin Materials (ORGNW)
Warrants in the carbon-negative plastics maker are at 1.07 recently, a little firmer. As the business gets closer to operating its first plan – near year end – it appears trading is taking on a more stable character, a plus. HOLD
Ree Automotive (REEAW)
On July 28, Ree will host an investor event in Michigan for a walk-in van it will build with Morgan Olson, an established delivery truck maker. Warrants at 14 cents of late are exceptionally weak for a de-SPAC’d business and that’s a result of some mismanagement of expectations by the company. The Michigan event should start to shift the market’s narrative around it. HOLD
ReNew Energy Global (RNWWW)
Renew refinanced debt to lower its total interest rate, always a plus. The company will release financial results for the full year ended March 31 on July 21. Warrants are about unchanged on the week, at 1.22. HOLD
Volta Inc (VLTA.WS)
The EV charger maker remains weak, with shares at 1.60 and our warrants are at 35 cents. The next earnings report will come mid-August. HOLD
Thank you for being a subscriber. Our next SX Greentech Advisor issue is published Wednesday, July 20. Get in touch with comments, suggestions and questions any time. Reach me at brendan@cabotwealth.com.