Enphase Energy...increased volume
Yesterday Enphase Energy closed down slightly at $19.89 on increased volume from the previous days NEW HIGH of $20.72. The companies fundamentals are still strong as we approach earnings announcement later this month. An increase in volume with a slight pull back in price, signals to me that some profit taking is happening.
Often times when investors are in a company early, and see profits of 100%, 200% over a period of time, they smartly take some money off the table. Some of the best times to do this is when the company is showing strong bullish movements. Referred to as, "selling into strength". This allows you to take sizable amounts out of the market without driving the prices down too far, and thus hurting your remaining investment in the respective company.
Too much profit taking when a stock isn't doing too much upward movement can spook other investors as a sell signal, and then herd mentality takes over. Fear (of losing money) is stronger than greed (of making money). So, to prevent this, smart investors find an appropriate time to take profits out of the market. Provided the stock is a strong stock, and as I said, the fundamentals of ENPH are strong. If there were concern about the companies future prospects, then a heavy volume day coupled with a lower closing would be a sign to pay attention to. But, a leading company, in one of the best performing industries, with huge upward prospects? I still have ENPH as a strong BUY.
The Solar Energy industry is up over 80% year to date, and ENPH is the leader in this industry, up over 290% year to date!!! While the energy sector is up a mere 10% :( What do you think? I prefer to follow the winners!!! ENPH!
DISCLAIMER: The contents of this article are for informational purposes only. Reader is encouraged to do their own research. The opinions shared are those of the author as of the date of this publication. This is not a solicitation to buy or sell any equity. Author is not a financial adviser, dealer, nor a registered broker. I just like sharing information about great stocks to inform others in the community.
