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SolarCity Corp (NASDAQ:SCTY) is riding high after Tesla Motors Inc (NASDAQ:TSLA) announced last week it plans to buy out its “little brother.” (CEO Elon Musk is also chairman of SolarCity and first cousin to its co-founders, Lyndon and Peter Rive.)
The move hasn’t been too well received by TSLA shareholders, particularly activist investors. But it certainly gave SCTY a boost: shares are up about 15% since the news broke.
Now, will that move continue? The technicals say: Yes.
Since the June 21 announcement, SolarCity has been throwing off a bunch of bullish signals, including a break above the short-term (21-day) moving average on June 23. SCTY then overtook the 50-day m.a. as well on June 28, and completed a Bottom Triangle the same day.
As the name suggests, this pattern tells us that shares have reached a bottom and show signs of reversing higher. It consists of two converging trendlines as the stock makes lower highs and higher lows…then, well before the triangle reaches an apex, it breaks above the upper trendline. That’s our signal that the prior downtrend is now finished.
From here, the Profit Scanner powered by Recognia is looking for SCTY to reach $28.75–$30 in about 30 trading days. In other words, SolarCity bulls can expect anywhere from 18%–23% further upside.
The stock then enjoyed a bullish Triple Moving Average Crossover involving the 4-day, 9-day and 18-day moving averages on June 29, so SCTY looks to be heading higher near-term as well.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.
