Hi Lou,
Bought some NRG-T. Just wondering what your thoughts are on this stock. I like the idea of renewable energy. I hemmed and hawed for the last year and decided the other day to buy it.
Thank you,
Rick
Hey Rick,
Thanks for the assignment. Alter NRG Corp. (NRG) is working to replace landfills with waste to energy facilities. The company markets and sells Westinghouse Plasma technology that converts a variety of waste products into synthetic gas that is then used to produce electrical energy.
What has frustrated investors is that the sales cycle for the solution has taken longer than expected. The central challenge for innovative technologies is getting potential users to take the plunge, especially when total project costs can reach into the hundreds of millions of dollars. Another factor to consider is that when your customer is a municipality that operates a landfill you can get bogged down in their ability to finance an innovative solution instead of carrying on with the same old, same old.
Finally for an old timer like me the story of waste to energy goes back to the 1970s when the technology wasn’t as advanced and community complaints about what was coming out of the process posed political problems. As recently as February of 2014 there were issues with a facility in Nassau County, New York where the ash emanating from the smokestack has residents up in arms.
An investigation of the charts will provide more particulars for your consideration.
The three-year chart outlines a path that saw NRG run hard starting in August of 2013. The stock had built a base at $1.50 through the first eight months of last year then advanced to a 52-week high of $4.96 by February of 2014. But unfortunately that was all the gas in the tank. Over the last six months the stock has broken below its 50- and 200-day moving averages. In addition, a death cross formed in July, suggesting that we could see more selling. Finally we have to recognize the resistance along the downtrend line and the series of lower highs and lower lows. The positive feature on the chart is the base building that has surfaced at $2.60 over the last month.
The six-month chart depicts the resistance along the downtrend line and the base building along $2.60. The MACD and the RSI generated a buy signal in May as NRG caught a bounce off $2.70 and ran to $3.70 in just over two weeks. At this time the momentum indicators are neutral at best.
You will need to monitor NRG to ensure that the base building at $2.60 is sustained and can form a platform from which a new advance can arise.
Make it a profitable day and happy capitalism!
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