It is a shame I did not put this post up earlier. It was in my charting program and is one I have been watching for many months. I did not post it up here earlier for various reasons but it is still good to point it out anyway even though it has already had quite a run.
ESLR is a solar energy company and I do believe that the alternative energy theme is one that will be important, probably very important for the next 10 years and the reason why I put it in the ‘Long Term Alert’ category. . .
If we are heading into an environment where we will have $100 + price of crude oil, then the economic viability of solar and other alternative energies is compounded. By the way, I do believe that eventually we will be at +100 per barrel of oil. I do not know exactly when, but I do believe this will be the case, probably before 2012. Incidentally, on the old version of this site I indicated the following in a report I did on May 13, 2004:
The daily chart of crude really does still look like a price chart that is in acceleration mode. My forecast is for 48 crude by August 2004. That would put the price right under the dotted blue channel line seen in the chart below. Crude Oil could go as high as 60 which would correspond to an RSI value of around 80. That price and RSI level would be consistent with the case of crude oil being in a major bull move here. For now though, the major obstacle and target remains 48.
Not too shabby eh?
As it turns out Crude Oil did precisely hit just around 48 by the August time frame of 2004. I made this forecast by the simple use of reverse trendlines on the price of crude oil chart. The old report is here.
Ok, back to alternative energy. As I said this to me is a very important theme to keep an eye on next decade. Imagine if every home in the United States had a bunch of solar panels on the roof? What would that be worth in dollars? I don’t have the answer to that question but I imagine it is a very big number, probably gargantuan number. But solar energy does not have to be the clear winner over the long haul. Maybe it will be fuel cells? Or mabye a combination of both? I dont know the answer to this either, but what I do know is that the early stages of any ‘new big thing’ typically appreciates the value of all the players regardless of whether or not they will be the proven long term winner.
You just have to look at lycos, yahoo, amazon and all the other dot coms.. everything was moving up then in the simple belief that it was the next big thing and that everyone would get rich if they just bought one of the players.. well as you know this is not the case at all. You had to be very selective and it is very very difficult to predict a long term winner.
Other players in this alternative energy space include Plug Power (fuel cells), Fuel Cell energy (also fuel cells but for very large corporate and government energy projects), Millenium Cell, and Ballard Power (Auto motive fuel cells). Incidentally many of the stock charts of the above look still quite ugly. Not enough basing yet to consider looking at… and the volume is horrible.
So here is the chart of ESLR. As you can see it had a huge reverse head and shoulders pattern which has to this point resulted in a nice new trend and breakout. That huge reverse head and shoulders pattern also morphs on a larger scale into what appears to be a rounding bottom formation . The growing volume supports this overall pattern. The slow upward arc that defines the rounding bottom pattern (not drawn) should provide longer term support for ESLR. Recently the stock had a big move on improved margins and expansion plans and is a very high risk entry. Will likely see eventual pull back to the rounding bottom upsloping arc. ESLR could be a ‘longer term play’ as long as energy prices remain high or head higher. I do believe though that the Japanese are getting into this space as well. Also Siemens and General Electric… Plenty of competition for this tiny little company.. but still as I mentioned earlier, in the early stages, a rising tide lifts all boats…
I would not be surprised to see ESLR at 13 by the end of 2005, early 2006.
Peace.
Im out.
P.S. I have plenty I want to say about GOLD… And plenty of charts that say a lot about Gold too… I don’t know exactly when I will get them online but watch out for them, they will yet again be in my own humble opinion, WHOPPERS. 😀