SUNW: Microcap Solar Breakout

A few weeks ago, I bought into Sunworks (SUNW) on what looked to me like an upside breakout from a falling wedge. In the weeks since, the stock has churned higher much faster than I expected. So fast, in fact, that I suspect a pullback is probably around the corner. That said, the action also suggests to me that the breakout is legit. Here is a 3 years chart of the stock:

2016-08-02-SUNW_CHARTS

I am a sucker for companies that offer good growth with positive earnings and little debt. SUNW appears to fit the bill on all counts. I used to live on microcap breakout plays like this, but SUNW is the first such buy I’ve made in quite a while. +20% so far. It’ll be interesting to see where it goes from here.

I remain ambivalent towards the broader market. The SPY has technically broken to the upside of serious resistance, but I am not convinced that it is anything more than a head-fake yet. Treasuries remain close to trendline resistance and I have taken a short position against TLT via TTT. Here is the chart of TLT:

2016-08-02-TLT_CHARTS

I have also shorted Nasdaq by buying QID, so I remain a bit bearish towards equities despite the apparent breakout in SPY.

Today (8/2) was a weird one in that both QID and TTT were winners, as both equities and Treasuries were down. Then again, despite their roles as theoretical counterpoints, I suppose if they can both rise over a half decade, they can both fall.

Good luck trading!

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